home wont appraise

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    Good morning everyone! Ive been on pins and needles since the start of my contract. I’m doing a new construction and the listing agent told me the homes were appraising 14K higher than the base price and sent me to the design center to select options. Long story short my home didn’t appraise (subject to) and my naca realtor file a dispute and they did a second appraisal(subject to) and it still came in at a low amount. The appraiser wrote a comment asking for recent comps but Naca wont allow us to submit any comps after the date I signed my contract. The Naca agent told me even when they do the final appraisal Naca wont allow them to look at recent sells. I need help with this. I dont want to lose out on my home


    @Leshelle84 I went through exactly the same thing you are going through and I also thought I was losing the new construction house because of the low appraisal. I also requested a 2nd appraisal giving valid reasons why the appraisal should have been higher. I was also told that the final appraisal when the house is finished won’t increase the value, it’s just to check that everything was done as it was supposed to. what was the argument in the dispute that your agent filed? Is this a project of many homes? If so, have they already closed any of them before you signed the contract? Would the builder re-negotiate based on the appraisal? Did you do upgrades?… In case you are not able to provide the comps, Are you able to pay for the difference between the purchase price and the appraisal?


    Thank you for responding south Florida! I didn’t see what the realtor said but I know they didn’t receive he upgrades I selected for the home and they also did not know the contract price. There was maybe one or two homes that were close to my contract price but it didn’t make a difference in the appraisal. I’m still 14k short and the builder will not come down that low! So my realtor is trying to negatioate.

    May I ask what happen in your situation? Did your home appraise for a higher value during the as is appraisal?


    No it did not, it came back with the same value. In my case I don’t have an agent so I disputed it myself, there were a couple of homes that had sold but the appraiser deducted the incentives from the purchase price of the comparables which brought down the value of the appraisal. When is it scheduled to be finished?


    Sorry to hear that. I have never heard of an appraisal not being able to include comps after the contract date – generally the effective date of the appraisal is the day when the appraiser inspects the house (or empty lot in a new construction case) and they can use any sales up to the effective date. If what you are saying about NACA is true, then I think it is rare.

    New construction upgrades are famous for being ‘overpriced’ and unfortunately you don’t get dollar for dollar back in the appraisal for most upgrades. Some builders even make you pay 50% of the upgrade price upfront in cash because they know the house won’t appraise once the upgrades are added to the loan amount.

    Maybe you could use zillow or have your agent try to find better comps to support your price (add the comps to the grid in page 2 and do some calculation to see if the new comps justify your purchase price.)

    If there is one good comp that is most similar to your house, sometimes the appraiser can give most weight to that house even if the other
    comps don’t support the price (you can’t tell the appraiser how to do their job, but maybe suggest and see if they can do a new appraisal?)

    Sometimes pending/under contract homes can support your price, but generally closed sales are more powerful (especially recently closed sales)

    AS Southflorida mentioned, if the appraiser deducts seller concessions that will lower the price…maybe the can not deduct seller concessions.

    If your market is increasing in price, you can suggest the appraiser make positive time adjustments to the comps that sold a few months prior to your contract date.

    Lastly, negotiate with the builder. You should have the appraisal contingency selected in your purchase contract, so in this case you are not obligated to buy the house if your appraisal comes in low. Use that as leverage with the builder because as much as you want the house, your lender forbids you from buying it at that price and you are free to walk away (even though you really want the house still).

    With all that said, it is possible you won’t get this house.


    Well Naca was firm about not letting us submit comps for homes that closed after my contract date. They have all the comp for homes that where before my date but it didn’t change the appraisal amount. My realtor is negotiating with the builder now. So it’s looking like the $7k I’ve put down in earnest and options will be used to help make up the difference. Oh I wil have to give up some of my options as well. I’ll keep you all updated!!!

    I think we can still make my dream work out!!


    Good luck! Keep us posted


    @Leshelle84 I was going to suggest essentially what your realtor is doing — putting down a down payment to make up the difference. This has worked for other NACA members. As long as your mortgage is at or below the appraisal, then you should be good to go. It looks like you have enough money saved to make up the difference. I hope more members view this thread because this is a recurring issue for members who are purchasing new construction. Very rarely have I seen a new construction appraise for the mortgage amount. The appraisal is always much lower, which puts members in a bind. @Leshelle84 I’m glad you have the necessary funds to make this work but this would prevent others with less savings from being able to purchase their dream home. I think NACA may need to revise their rules regarding new construction. If enough members contact Bruce about this ongoing problem that might get the ball rolling.


    @leshelle84 I am also buying a new construction and I went under contract in February, my appraisal was done in September and they DEFINITELY used properties sold after my contract date. As a matter of fact, 2 of the 6 comps used are still under construction along with my home.

    I guess I am one of the rare situations, but thankfully my appraisal came back 5k over the sales/contract price. Since the home was 50% complete at the time of the initial appraisal, I am PRAYING the final appraisal doesn’t come in any lower.

    I would get the information from NACA directly as to why they cannot use recent comps and ask them where that is in writing.

    Good luck!! Keep us posted


    I am going through the exact same situation right now. Appraisal blues. My new construction dream home was priced at 208,490 and the appraisal came back at 196,00. We just submitted the dispute to the bank (successfully) this past Friday evening after going back and forth between the builder’s broker agent and the NACA BOA Dispute team 2 and 1/2 weeks to be exact just to get the dispute submitted properly by DR Horton’s agents. If they only knew how much stress I have been through. I haven’t been able to sleep in about a good month.

    I have a few questions for anyone who may have some answers. Does the lender automatically do another appraisal or do they try to adjust the previous one? How long does the second appraisal take? I don’t have that much money saved to just come out of pocket for the difference so I am really praying that the builder will have mercy even though I know it is a long shot. Any helpful information would be so greatly appreciated.


    @blanconatalia I am dealing with a similar situation. Final appraisal was done and house appraised $6500 lower than sales price. This is a new construction home. My realtor helped me with the dispute and I sent it to the appraisal dispute emails provided on 1/10/19. Still no update yet.

    How did everything workout for you?


    Sorry for never updating. So long story short my realtor negotiated for me. So I went from 14k to having to only pay 4K. This was covered by my hefty earnest deposit. What I learned through this whole process is to stop stressing and if you have all you stuff together it will all work out. Also if you have a kick ass Naca agent like mines it will definitely work out!!!!. It might cost you but it works!!! I moved in my house on Dec 21. My first payment is due in Feb!!! Good luck to everyone!

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