Quote:
Originally Posted by kittylecroix
SS
According to our agent, it's terrible with the banks and the appraisals. Now they are only going back 3 mos. for comparables(there aren't any around where we live) and although our buyers only need 125K, the house MUST appraise for the sell price of 375K--WHY?? I don't get it. The appraiser is coming in 10 minutes and we are AGAIN nervous wrecks.
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It's complicated. We went through this once when we where buying, where the appraisal didn't come in at the asking price. If I understand it correctly and I may not, If they are getting a Mtg rate based on say 20% down (but they are putting down more than that) and the appraisal comes in at a level to cover the Mtg + the 20% (say $157) but not the full purchase price the lender may allow them to still go with through with the sale so long as they sign a letter saying they understand that the appraisal is less than the purchase price and that the difference may be non recoverable. We did this once in CT. It was the only house within decent commute distance to Sikorsky and we wanted it and I did my own appraisal with comps pulled by the realtor and decided that in the long run it was still a good buy, and I was right we sold it three years later at a healthy profit. The problem is if they are going for a funky loan, say interest only or negative amortization then the bank won't budge. Another way to fix the problem is to sell them the appliances under a separate contract. The appraisal doesn't consider appliances as they are not a 20 year asset, I was told this when I disagreed with the appraisal as the house had all new appliances and heating system and the comps needed same replaced in a year or two. I have rambled on sorry.