FHA Appraisal came in $40k low, what should we do?

[Kris Haskins]

We have a house that comps at $200k, and have a 3 month old appraisal that backs that price up. Our buyer just had an FHA appraisal that came in at $160k. We've tried to give the comps from the $200k appraisal to the new appraiser and he's only adjusting up another $5k. Can somebody please tell me how to handle these guys and perhaps get a value to the lender?

[Patrick Connell]

Kris Haskins , what's your agent saying?

Here's the problem with your deal, first, an appraisal back in October was more than likely using comps that sold during the summer months; typically a busier, more competitive, and higher prices time of year. Those comps are no longer valid, since appraisers will use comps in the last 90 days, if they're available. It's likely there are more recent comps that sold during the winter but at a lower price point.

Second, an FHA appraisal now sticks with a property for 6 months; meaning any other buyer using an FHA loan will have to use the same appraisal for their underwriting. This excludes a large number of buyers at that price point.

Finally, if you've rehabbed this property and owned it less than 180 days, your FHA buyers will have to get two appraisals, or one and a desk review, that give it value.

Your best bet, given the info, is to pull the property and re-list in a few months.