Hollywood, FL · Member since 2019 · 27 posts · 0 votes
Hello,
I am purchasing a rental property subject to inspection and appraisal . The purchase price is 81K and the appraisal came out at 90K but the median price sale in the last 6 months was 116K for 14 sales in the last 6 months. In addition, zillow lists the property around 120K. Any suggestions on how to fight a seemingly low appraisal?
I am purchasing a rental property subject to inspection and appraisal . The purchase price is 81K and the appraisal came out at 90K but the median price sale in the last 6 months was 116K for 14 sales in the last 6 months. In addition, zillow lists the property around 120K. Any suggestions on how to fight a seemingly low appraisal?
Price is $81k, appraisal came in $9k high at $90k. There is absolutely no point in disputing this appraisal... what's the goal, to convince the seller to raise the price on you?
I am purchasing a rental property subject to inspection and appraisal . The purchase price is 81K and the appraisal came out at 90K but the median price sale in the last 6 months was 116K for 14 sales in the last 6 months. In addition, zillow lists the property around 120K. Any suggestions on how to fight a seemingly low appraisal?
Price is $81k, appraisal came in $9k high at $90k. There is absolutely no point in disputing this appraisal... what's the goal, to convince the seller to raise the price on you?
Not sure what appraisal amount you are trying to get to. Median price range and/or Zillow are not relevant to your property. Median is a general number based on the number of sales. Its the middle number of sales. If there were 13 sales the median sale would be the 7th. Its only a statistical representation. Zillow is not very accurate either it is another algorithm. If you want to challenge the appraisal you will need a comparable sale of a similar property in your neighborhood. Same style of home, number of bedrooms, number of baths, similar square footage, comparable age, same school district, etc.
You are the buyer, you want the appraisal to be low. You want the appraisal to be high when you sell. The appraiser is taking your purchase price into consideration as well. That is lowering market value. Why are you so concerned at the appraisal and what do you get for the appraisal to be higher? Nothing.
1) any loan you are getting to buy this property is a percentage of the purchase price or appraisal, whichever is Lower? A higher appraisal doesn’t help you get a larger loan.
2) the appraisal is good for Only this purchase transaction, not for later refi’s.
I don't see your problem either, it's when the appraisal is below selling price you have a problem unless the seller negotiates. But go over the appraisal with a fine tooth comb. Particularly double check their Sq ft measurements. I've had them fudge those up to 20% low to get the number they thought it should come in at. I tried to get the bank to get a new appraisal when I pointed out the footage, and therefore the price, was under by 20%, they told me to get stuffed. On that appraisal the 3 different methods, replacement, rents, and comps, all amazingly came out to less than 1% of each other. Appraisers are criminals and frauds IMO.
@Johann Jells I'd be have to agree on appraisers. I bought a new primary residence last year. The appraisal came back at exactly the purchase price. Seriously!? I asked my realtor and he said that's actually fairly common. What!? Are appraisers seriously that lazy? And banks seriously allow appraisers to give the exact purchase price that much?
I’ve been down that road. When an appraisal is done by your mortgage company, they are only appraising it to see if it’s worth what they are going to be lending. They aren’t looking to give you instant equity.
I was looking for a high appraisal to use down the road in a few months for a cash out refinance and to get an idea of the amount of equity already present based on the purchase price. I am paying cash, no finance. turns out that the inspection shows 10K repairs and I need to negotiate this instead...I won't be fighting the appraisal.
Since you plan on refinancing in a few months, this appraisal has served its purpose. Your lender upon refi'ng will force another appraisal.
Something to consider, if you do not plan on making any improvements to the property prior to your refinancing, the equity you think you may have may not be there. However if you plan on improving first, appraisers have to take the purchase price and any improvements you have made in the last 6 months into consideration for their appraisal. Document well and submit to your refi lender everything you do to the property. It will help in your second appraisal.
@Scott Greer thank you so much and thank you all as well. The plan is to refinance and the property needs about 10K in repairs, will save every receipt. We are asking for 10K credit at closing.