I am selling a townhouse in VA for $208000 and the buyers agreed and signed the contract, well here it is 8 days before closing and the Buyers' Bank comes back with a very low apprassial of $185000. Now my realtor is telling me to either sell at that price or take it off the market or maybe even rent it out. This project was a flip from top to bottom... everything done. I ran comps in the area before I placed it on the market and they where from $195,000 to $200,000 and they were not even in the shape of my flip.

I'm heated right now, but I need some advice!!! What are somethings I should do.

What is the buyer saying? You could ask the buyer to switch lenders and get a new appraisal. You could just move on to the next buyer or you could see if the buyer wants to come up with some cash(not likely).

I would contact the appraiser. Let the appraiser know about the comps you have. Give them all your information to support the selling price. Are there any other comps that recently sold that could support the sell price?

Lenders and appraisers are being very conservative now because of the upheaval in the mortgage markets.

Also, we don't know you experience level in intrepreting the comps you 'ran' and used. Comps in a general around around your project are not necessarily relevant to yours. That's why appraisers get paid; they're pretty good at selecting and intrepreting comparable sales to arriva at a valuation.

That said, appraised values are not always the final sale price; that depends on the market conditions in your area and the demand.

They generally don't appraise more on the cosmetics.

You could see if the buyer would hold a sellers second.It appraises at 185,000 and the buyer holds a 20k second they make payments to you on.

Definitely challenge the appraisal.

I have had appraisers that didn't know what in the &ell they are doing.Some say they are local to the area but live hours away and the comps they select are not a match at all.You really need the addresses of the comps they used but the bank might not give it to you as they ordered the appraisal.Hopefully you didn't use comps on the high end when you did your flip.The market could have also came down from the time you bought it until the time it reached the market.


good luck and no legal advice

Uh..no...don't say dumb things....you know better than that...



'Your' comps...were they in the same block of townhouses? The thing with flips is $5,000 in floor coverings does not return $10,000 in value like the tv shows say. Your top end was $200k and you list at $208? In today's market? I would have started with $199k IMO. Flippers tend to be unrealistic with their profit dreams.

Pay for your own appraisal because the buyers do not have to provide you with their copy. If yours results in a better outcome, then you have something to stand on.

Appraisers will listen to valid points if you talk through them reasonably. If you come on strong, you won't get very far.

Also, during your flip have there been any recent sales that have happened that have negatively impacted the average selling price? This new information may be where this low number is coming from. Good Luck!!

Get your own appraisal and take it from there and be thankful the lender is still willing to make the loan.

No appraiser with half a brain (& I realize most are not geniuses) will allow him/herself to be influenced by a homeowner regarding value.

The appraiser works for the buyer's lender & has no obligation to the seller.

Why on earth would the bank pay attention to a seller purchased appraisal?

Many markets are declining & if this is a high LTV loan the bank is being asked to loan more than the house will be worth in a few mos.

And be aware that the lenders themselves are cutting appraised values routinely in declining markets, ie they will chop 5% off the appraiser's value to protect themselves.

It is what it is. I'd be relieved to have a buyer at all. Either reduce the price or keep it on the market hoping for a new qualified buyer & that the value won't fall further.

This all comes down to a simple question. At the reduced price are you still able to make an acceptible profit on the flip?

If the answer is yes then sell it and move on to the next property. IF the answer is no then you likely paid too much for the property when you bought it or over improved the property.

I would definately challenge the appraisal to see what comps the appraiser used in the valuation. It is possible your comps are better than those chosen by the appraiser especially if the appraiser was from out of the area. Were you present when the appraiser went through the property? If no that was a mistake as I am always present for appraisals of my flips because I want to make sure the appraiser is aware of everything that was done. In addition I always have an appraisal done just as soon as the property is ready to sell to verify my calculations and it is something I can submit should the buyers apprisal come back extremely low.

DesertRose's first comment is nonsense. An appraiser will definately listen if you can show him or her a more suitable comp than those that were selected.

I'd suggest talking to an ETHICAL appraiser about that.

Been there, did that and more than once. An appraiser will listen if they made a mistake and adjust accordingly. If they screw up and don't listen then what good are they?

If appraisers were 100% right all the time we wouldn't have half of the mortgage mess right now.

If paul was talking about a scenario in which *he* retained the appraiser for his own edification, that is not the same situation about which OP posted. If you hire an appraiser you are free to harass the apparaiser all you want.

In this situation, the appraiser works for the buyer's LENDER & should not be influenced by any interested party.

The BUYER can ask for a review or a 2d appraisal if the buyer chooses, the lender can allow it or not.

No appraisers are not 100% right. A good part of the mess we're in is due to pushed appraisals, no question.

And one more time (for emphasis) values in declining markets are now being cut by the LENDER not the appraiser quite often.

But if anyone has had experience as a seller of influencing an appraiser to raise value, I would LOVE to hear about it. Please do post.

DesertRose,
You got it wrong as usual. Ethics has absolutely no bearing on an appraiser taking into account comps that he or she may have missed and are brought to his attention. If the comp is actually a better match for the subject property there is not reason that an appraiser could not ethically use the comp for the valuation.

I have on several occassions provided better comps to an appraiser on properties that I was selling as an investor. Several of these I knew were better comps because I had actually previously toured the comps before they sold. Most appraisers are not so closed minded as you would like and they know full well the agents are very likely to know comps that could work better than those they simply got from their MLS sold search. You should know if you are an experienced agent that a simple error in an MLS listing may cause the property not to show in a search but yet it may be the perfect comp.

Bringing potential comps to an appraiser is not harrassment unless you have your own special definition of harrassment. DesertRose do you know what USPAP is? If no perhaps you should read it before you make anymore assumptions about what is ethical or unethical in an appraisal.

probably time to lower your price