@Ema Silva
Based on over 40 years in the real estate industry, I can tell you in my opinion many people overestimate the value and accuracy of an appraisal.
If you were to get three appraisals on this property (providing no purchase agreement), you would probably get three different values. The idea of no purchase contract is to force appraiser to determine a value independent of any sales price to aim for.
Appraisals often will have a range of error of +-3%. Market value is a range of values not a specific number.
What’s the purchase price? $30,000 on a $300,000 deal is a much different issue than $30,000 on a $1,000,000 deal.
The “low” appraisal would make me take a second and third look at my underwriting. What am I missing? What does the appraiser do differently than I?
The other factor is: How hot is your market? if the subject property is in some for lack of a better word “podunk” town where population jobs and values are stagnant, the $30,000 would be of great concern. If on the other hand, your market is super hot, that $30,000 could be made up in six months appreciation.
I can tell you in any growth market of the country, if someone bought in March 2021, and thought they overpaid……I can tell almost without exception, those buyers are ecstatic they bought in March and overpaid because the value of their property probably has increased in 6 months by way more than $30,000.
Real estate investments for me is a long term game. I look to the future more than the immediate present. I look at overall future prospects of that market.
The great thing about investing is it is easy to talk a good game. Investors have to put their money where their mouth is - so it’s real, it’s not hypothetical.
Can’t tell you what to do. Hopefully, my thoughts present a different perspective.
Good luck!
