Reasons Appraisals Come In Low

Reasons Appraisals Come In Low

Appraisals, appraisals, appraisals.  They are great when they come in at the value we want it to--and they are a pain when they don't meet value.  They are pretty much out of our control, but here are some tips that might help that value come in at that magic number.  www.michelleforemanrealtor.com or michelleforemanrealtor@gmail.com.


Top 9 Reasons Appraisals Come in Low

 


home-appraisal-report


Unfortunately, it happens: A low appraisal in the already bumpy home-buying process. Suddenly, you find yourself in a conundrum: Your bank will fund a loan only up to the appraised value. So do you walk away from the sale? Do you fork over more money to cover the difference? Do you crawl into the corner of the apartment you fear you’ll rent forever and cry your little eyes out?


There are ways to deal with a low appraisal—but only if you know why it happened.


Behold the 9 most common reasons for a low appraisal, according to our expert sources.


1. The appraiser doesn’t do a neighborhood deep-dive

To appraise the value of a property, appraisers rely heavily on comps, which are prices paid for similar homes sold recently. But the appraiser could select comps of homes that sold for mysteriously low prices.


2. The appraiser has to go outside the hood

Sometimes there isn’t enough data on sales of similar homes in the area, forcing the appraiser to use comps from a nearby—and possibly less desirable—community, Grabel says. Ideal comps should be similar in style, size, location, and view.


3. The importance of the view

Does your home have a knockout view—or, at least, one that’s better than the comp down the street that overlooks unsightly power lines? If so, make sure your appraiser knows it, too. If the difference in view is not obvious, your home could appraise for lower than expected.


4. A gorgeous basement

The house has a large, beautiful finished basement with a bedroom and a bathroom. You’ve doubled your square footage. Score! Unfortunately, appraisers are required to use much lower value per square foot for space below ground.


5. The extras that totally sold you aren’t selling the appraiser

Surprisingly, a pool, tennis court, and high-end landscaping are attractive features, but they frequently don’t lead to significantly higher valuation on appraisals. Here’s why: When an appraiser compares two otherwise identical homes, one with the amenities and one without, the difference in their selling price is typically not nearly as much as the cost of adding these features—especially when the amenities are of better quality than is standard for the area.


6. The condo is the best in the building

Upgrades and finishes might not always boost the value of your home. This is particularly true of co-ops and condos, where the square footage plays a major role in value.


7. The market is too hot to keep up with

Home prices in the area might be increasing so quickly that the comps that sold six months ago don’t yet reflect this improvement.

         

8. You intentionally overpaid

There are many reasons you might overpay for a home: You might just fall in love with the place and want to make sure you get it—at any cost.


9. The appraiser is inexperienced—or just bad

Sometimes, it really does come down to a job not well done. The appraiser could be unfamiliar with the nuances of the local market or might simply rush through the job. Unfortunately, a home buyer obtaining a mortgage has no control over the appraisal selection process—your lender is the one who orders the appraisal, either directly from an appraiser or through an appraisal management company.


Worried about getting a dud? You can ask your lender how it selects appraisers or if there’s a particular company it uses—then do your homework.


http://www.realtor.com/advice/buy/top-9-reasons-appraisals-come-in-low/


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Phone: 480-980-9025
Dated: March 16th 2016
Views: 1,244
About JP: JP Piccinini is an entrepreneur, philanthropist, proud dad and the Founder, Broker and Owner of JP a...

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