The SFH I'm under contract for $88,000 had the appraisal come back approximate $20k UNDER that price. My agent is going to see about getting a second opinion paid for by the seller. I'm in limbo now.
Let's say a second appraisal comes in way under, what would you experienced investors do? Bail and cut losses on some fees already paid for (inspection, appraisal, etc)?
The SFH is currently rented for $895 and runs through August 2020. I would have been doing 25% down with 4.5% interest rate. My numbers were looking like a cashflow around $200/mo.
Any insight and advice is greatly appreciated. Thank you!
@Alex Wasilchuk With an address we could look into it a bit. What do the comps look like? Is the appraiser right? If the appraiser is right this was a mistake from the beginning and you should cut your losses. If the appraiser is wrong why? They can get in trouble for this and may have to amend if they were egregiously wrong which being 25% off may be. Your realtor wants another opinion because they want the sale to close not because they feel strongly about the value of the house.
The comps in the appraisal are around 68-72k
If they are good comps it sound like the properties worth about $70k and that appraiser just saved you from overpaying $18k. You should buy him lunch and move on. Maybe ask yourself and your realtor how you both got “tricked” in to offering 30% over the true value. Can your realtor not find any of these $68-72k buildings for you to buy?
@Alex Wasilchuk so it really seems like the appraiser might be right here and the question becomes why were you trying to buy a $70k property for $88k