The appraisal that came in super low

7 Replies

Hi all,

A Triplex that I'm in contract on just came back with an appraisal that is $12k under what the accepted offer is. This has never happened to me. What is protocol typically? Should I ask for all of that off the sale price?

Thanks in advance for any ponderings.

From my understanding you can probably expect the buyer to ask to sell at the appraisal price

A few options come to mind: You can ask the seller to reduce the price and see if they are willing to negotiate. You can try to appeal the appraisal or request that the bank allow a second appraisal to be completed. If that doesn't work but you are still confident it's a good deal and want to move forward, you can put down extra cash to make up the difference. Good luck!

Originally posted by @Christen G. :

Is it a bad thing? Or a bargaining position...both?

If the appraisal is genuinely flawed, according to an analysis that emphasizes CCCR (Close, Comparable features, Closed, & Recent [yes I made this acronym up]), then by all means dispute it based on that factual data. Do not spend a lot of time on price per square foot, that's more for consumers than professionals.

But, to answer your question directly... It's both. 

It could kill the transaction, yes. And $12k either way, for an investor, shouldn't be make or break on any property, so this is bad because it puts the entire transaction at risk.

On the other hand, you've got a listing agent over there on the other end of the transaction that wants it closed so they can move onto the next one, rather than trying to re-list it for what amounts to maybe ~$200 more for them at the end of the day, for twice the work. Dig your heels in, and who knows what this person will whisper into the seller's ear.

Update here: the seller was eager to get it off his hands and go on vacation and they took 12k off! Solid. Thanks everyone.