Currently there is not a lot of inventory available and many homes are having multiple offers on them. After viewing several homes, my buyers decided to place an offer on a house for the list price and request closing costs. They felt the list price was fair and if they received the closing costs then they would have a good deal.
The offer was accepted and the inspections and the appraisal were ordered. The inspector found only minimal items wrong with the property. The appraiser measured the house and discovered it was slightly bigger than the county records. He also found only a few comps and called me to ask if I had other comps. I shared what I had but he was not satisfied, so he called the listing agent. This sometimes occurs in an appreciating market.
The appraiser told me he was coming in several thousand dollars low and I wanted to cry. Then the strange thing happened. The listing agent got a call from another appraiser wanting to do an appraisal on the same house. We called the first appraiser back. He said, yes he had been out to the property and couldn’t get the value or didn’t feel comfortable with the comps he had to use, so he rejected the appraisal. There would be no charge to the buyer.
A new appraiser came out and was able to substantiate value for the sales price and we were able to close.
Once again I reiterate an appraisal is an opinion of a third party as to value and condition so the bank knows that the collateral they are lending against has merit. A property like anything else is only worth what someone is willing to pay for it. I do not believe that the buyer overpaid for this property. I do believe that there were few comps to review to make a decision on whether the bank was loaning on a property that had the value to use as collateral.
Some may ask why the disparity between appraisers. Appraisers determine value of the property based upon the contract and the other properties in the immediate area. Appraisals are always comparing properties looking backwards for homes that have sold within the past several months. If inventories are low then the market may be appreciating and the comps from a few months ago will be lower. In a market that is increasing or decreasing in value, this can always be a little tricky especially if there is limited inventory.
If you are interested in buying or selling a home, please feel free to contact me at 405-213-2992 or http://www.sandiwalker.net