Update on my Status- Low Appraisal

Home Forums Purchase Program Update on my Status- Low Appraisal

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  • #13538
    rashad3000
    Participant

    So, the appraiser did not do his due diligence (in mine and my Realtor’s opinion) and has valued my home at $211,000. We are under contract for $214,850. So right now, we are $3850 apart. After appeal, if the appraiser does not meet the contract price and if the builder refuses to lower the price, we will lose our dream home at a dream 0.125% rate. At the end, I think it will all work itself out. However, I don’t think this should even be a possibility that we lose the home. The builder is giving us $7500, so that well than makes up for the so-called $3850 we would be upside down. So I just think it is ridiculous.

    I missed this site. Glad it is back up. I’ve been feening!

    #13541
    me2113
    Participant

    LOL @rashad3000, me too. I come to this site, like some people check email, daily, and several times a day. There is just so much good information, and like someone mentioned in an earlier post, it’s like a support group. I just went into contract on a home, and am hoping it appraises at list price. Very low inventory here in Cali, so there’s not much room for negotiation on price these days.

    #13543
    rashad3000
    Participant

    I just had a thought: if all mortgage companies said they would not lend to anyone above appraised value, how could any home ever appreciate? For instance: a home goes on the market for $100,000. Ten people are willing to pay $100,000. However, the home appraises for $99,000. No mortgage company will allow you to out down $1,000 to make the $99,000 mortgage, so the seller reduces the price to $99,000. If all mortgage companies operated this way, how would it ever be possible for homes to appreciate? Why can’t you let the market work itself out? What if someone wanted to pay $105,000 for that home, and was willing and able? The only way the homeowner would be able to sell it to that person was by a cash deal.

    I just think that the market is soooooo volatile to use such a subjective tool like the appraisal to make or break a deal. My appraiser said my home is worth $211,000. Who says it won’t be worth $190,000 in a year? Who says it won’t be worth $220,000 in 3 months? It just seems to me that there should always be exceptions to every rule. You find your dream home for $200,000. It appraises for $198,000. Seller agrees to meet you 1/2 way at $199,000. The only way you would be able to close the deal is by doing something I assume is illegal, like giving them $1000 cash under the table and doing the deal for $198,000. I’m sure these types of things go on, when you have such a black and white policy.

    Vent over. Can’t sleep worrying about this stupid appraisal. I have to talk my wife off of the ledge.

    Me2113, good luck. Keep us posted.

    #13544
    ontheroadagain
    Participant

    @me2113 and @rashad3000, I am also happy the site is back up. I have so much to vent about..LOL. Well I have been sent back through underwriting for the 4th or 5th time now, I have lost count. This last time the underwriter took almost 8-10 days, lost count again…to respond to my file, and came back with a condition that was taken care of back in Feb. Condition was for me to move my funds I will be utilizing for MRF from a prepaid debit account to my credit union account. Before I was submitted my MC warned me and had me do that and we had already submitted proof along with my Feb bank statements that the funds had been moved. So my MC has again submitted my file back to underwriting and is requesting for the file to be expedited as I have been going through this back and forth for things already submitted since 2/12/15. I am trying to remain hopeful and keeping my fingers crossed that a miracle will come thru today and I can go to the purchase workshop this weekend.

    #13565
    TTrumble
    Member

    Hello rashad3000,

    There’s nothing at all wrong with market forces being a part of the pricing equation, but your examples have very little to do with appreciation in value and was in fact one of the factors that created the housing bubble. The market ran amok with homes selling for far more than what they were worth because uneducated borrowers were buying up houses in a frenzy. However, this automatically meant that people were already underwater they day they signed on the dotted line. The lenders were dealing out mortgages like playing cards, and a big spiral got started.

    Market forces are not the sole factor in determining the value of a home. Especially with new construction, material and labor costs, etc., plus a reasonable profit of course, should determine the true value of the home, not what somebody is willing to pay above and beyond that value.

    After the bubble burst I saw cases where the value plummeted to as low as 40% of the balance of the loan.

    Appraisers are typically very much on top of market trends on pricing, and how it can effect actual value. But in times like these, when housing inventory, both new and pre-existing, is very low, some sellers will attempt to take advantage of the situation and over-price the property above and beyond the true value, i.e., price gouging. That is why NACA will never approve a loan above the appraised value of the home.

    All that being said, appraisers are human and do sometimes make mistakes. When that happens, you just have to take action to get the mistake corrected. In your case, once the appraiser is made aware of the other mistake he made, you may find him more agreeable to review his previous appraisal amount for you as well.

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    • This reply was modified 5 years, 8 months ago by TTrumble.
    #13568
    rashad3000
    Participant

    Hey Tim. Thanks for the reply. Look at the time I wrote this. It was well after midnight, and I was pretty fired up. Probably not too rational. I completely understand how it doesn’t make sense to pay more than something is “worth”. Over-inflated values definitely caused a lot of idiotic purchases and fraud back a few years ago.

    #13569
    rashad3000
    Participant

    Just logged into my file and see under my conditions that an updated appraisal has been received. However, I cannot view any appraisals in my webfile. My professor told me that the files are too big to load.

    #13576
    Kristopher Fraley
    Participant

    This is a challenge for sure, but I feel like everything will work itself out. You have worked too hard for this moment! I cannot believe a measly $3850 given your extremely unique situation of buying down to .125% is going to cancel the whole deal. One way or another it simply has to work its way out.

    #13578
    rashad3000
    Participant

    UPDATE:

    My file says “Updated Appraisal Received”. Of course, I assumed a new appraisal was turned in. I called and spoke with my processor. She said that my loan is suspended until they hear back from the appraiser.

    #13580
    ontheroadagain
    Participant

    Suspended??? What exactly does that mean?

    #13585
    rashad3000
    Participant

    I’m assuming it means on hold, until things get cleared up with the appraiser.

    #13586
    ontheroadagain
    Participant

    I hope things clear up for you soon

    #13588
    me2113
    Participant

    Wow… hoping the best for you too @rashad3000.

    #13589
    rashad3000
    Participant

    Thanks. I will keep you all posted 🙂

    #13590
    TTrumble
    Member

    Hello all,

    “Suspended” sounds worse than it really is. All it really means, as rashad3000 suspected, is the process is stuck until the appraiser corrects an error and hopefully adjusts the appraised value in our favor.

    Just stay on top of the situation (as I already know you will do).

    Tim Trumble
    Online Operations, NACA
    ttrumble@naca.com

    • This reply was modified 5 years, 8 months ago by TTrumble.
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