Appraisal came below what I expected
Hello everyone,
I need help in deciding whether to go forward or not with this investment property. The list price was 85K. I am now undercontract at 81K. I asked for repair adjustments of 4K and they accepted. Now the appraisal came right at 82K. And the appraisal was done on cost based and market comps. It did not consider the repairs I found the property needs. What do you advise me to do? Should I ask the seller to go down another 3K?(85K original list price - 82K appraised price).
Thank you for your help!
Most Popular Reply
@Wogderess H. some of what you are saying is not making sense. Your comment about the appraisal being "done on cost based and market comps" is confusing. On the Residential form, even though the cost approach to value is done, rarely is it used to get the Final Opinion of Value (Market Value).
As for the seller going down, why would he? You agreed to $81 and the property appraised, so from appraisal stand point, the transaction should continue. If you think the property should have appraised higher than say $85K maybe you are confusing the the current appraisal with the ARV you think you will get after you do the minor repairs. It sounds like you may not have complete understanding of your numbers.
I hope it works out to your benefit.