All Forum Posts by: David McClain

I don't need a 240 appraisal.  I need a 215-225 appraisal and the buyer will bring extra cash to the table.  She sees the value in the property and house that the appraiser doesn't see in his "formula".  And the appraiser was a bit of a jerk and on the defensive before "Good morning" left my lips let alone waiting to hear what I was calling about.  he just defended his position, told me I did a wonderful job with the house, but that I over did it.  I didn't overshoot the neighborhood, there are plenty of 240k+ homes within a mile, but about 15-25% more sq ft or less than 15 yrs old so he won't use as comps.  The difference in my house is the quality of finish and the amenities that these other homes don't compare too.  I found a buyer who was willing to pay for that, it just ended up being a math problem with the cash to close.

The comps that were close as I could find were 215-225, which again is all I needed to close the deal.

In the end the buyer and I worked it out, but I learned a lot from the experience.

I accepted a home sale contingency so soon after listing because I trusted my gut that this buyer was the one who saw what this house was, not the comps of the neighborhood. This community is basically one City sized HOA - the beautification codes and the way the city keeps up with the streets and municipal services are such a high standard that you could compare homes on opposite sides of town if you wanted. In fact this buyer was on the other side of town but had been walking by the property with a friend the entire time I was rehabbing. I knew she was highly, no, extremely motivated to make this deal work out. Which in the end it did, things are still on track, we just had a little drama for 24 hours:). Out of respect for the fact that she is going to be homeless in 7 days (her house is closing in a record 3 weeks!), I didn't ask her to go to a new lender. She would incur so many expenses in renting and moving twice that would end up driving her top end lower and lower even if we could get a higher appraisal. Instead of taking the risk that she decide it's too much trouble or end up in the same situation, I reiterated the value to her in this home and showed her what she could buy for 215 or what she could buy for 240. We discussed how far she could comfortably stretch. I ended up coming down a little for her and everyone feels they got a fair shake. Perhaps I could have squeezed a bit more out of the deal with a reappraisal and dealing with the bank, but decided my time is worth more using that money on the next property.

Thanks everyone for chiming in!

Cheers!

Thank you everyone for the replies and input.  I do understand she can back out at anytime now.

Renting is possible but not a great option because with the plan forward I’ve laid out I need the cash back out.  It could take over 10 years for the market to appreciate $33k. Yes I would have the rental income making up that gap, but if I pull the equity out through a loan of my own, then I have expenses and making up that gap takes a long time.  The margins aren’t there for this to make sense as a rental.

I haven't seen the appraisal yet.  I wish I had been there with a list of the upgrades.  Not to sell the appraiser but to make sure he knew what was done to the property. It was a to the studs rehab and has a lot of new mechanical, plumbing and structure that can't be seen, did he know the windows are brand new?  Did he know there is a sprinkler system, 100% new plumbing, 2 laundry hookups, 80% new wiring, brand new 200 amp service and box.  I know their process is pretty straightforward but I don't know how they weight any of those items.  All speculation at this time. Im not looking to take my own appraisal to the lender, but to have them order another because I feel the appraiser may have missed a bunch of things - I will be able to verify that once I see the appraisal.

Yes the purchase agreement did have an appraisal contingency.

I'm just trying to spitball some scenarios while I wait.

Hey there! Question about home appraisals and what to do when your selling price doesn’t match the buyers loan appraisal

I’m selling a house I rehabbed. Did the deal and rehab all in cash. Had an offer within 24 hours and purchase agreement made out for $240k. I did a contingency with the buyer allowing her to sell her home first. That happened and she is closing on September 11. The appraisal happened yesterday and the buyer’s loan officer called her and said they won’t have it back for a week because it’s with the underwriter but that he saw the number and it was $207k. The buyer said she can go to $215k.

I told her I’m not canceling the deal on this phone call but my initial response is that the price is $240k. Comps show about 215-225, but there isn’t a true apples to apples comp in the county.

Can I ask for a reappraisal? Any chance the underwriter approves a $240k purchase price? Do I carry a note on the difference? What will carrying a note for $25k do to her ability to get her mortgage?

Cheers!

I posted this in another topic but have had no hits so reposting here.

When I export my Flip Calculator Report to a PDF it lumps all of my repair costs into a "Miscellaneous" category. All of the other categories show "N.A." I would like to see them separated into the categories I used for when I print or email the detailed report. Is there a setting I have wrong? Thanks in advance!

When I export my Flip Calculator Report to a PDF it lumps all of my repair costs into a "Miscellaneous" category.  All of the other categories show "N.A."  I would like to see them separated into the categories I used for when I print or email the detailed report.  Is there a setting I have wrong?  Thanks in advance!