Re: Bank Appraisal - Selling Price
- From: krw <krw@xxxxxxxxxx>
- Date: Wed, 28 Nov 2007 17:34:29 -0500
In article <1190408018.881584.160140@xxxxxxxxxxxxxxxxxxxxxxxxxxx>,
Slain.k@xxxxxxxxx says...
On Sep 21, 4:12 pm, "John Weiss" <jrwe...@xxxxxxxxxxxxxxxxxxx> wrote:
"Slain" <Slai...@xxxxxxxxx> wrote...
The home inspection further revealed problems with septic etc and we
brought up those issues. The final nail was the bank appraisal, which
came up to be the exact price as the mortgage that is 295k. Further,
the appraisal says that the house is in need of no renovation or
repair due to the recent changes. How ever the house is in not so good
shape and the reason they had agreed to let go of about 50k was
because of the repairs it needed.
OK...
The seller originlly thought it was worth $345K, but agreed it needed $50K
of repairs to make it REALLY worth that, and so the 2 of you agree it is
now worth $295K. The bank appraiser agreed that it is worth $295 in its
current condition. What is the problem?
The inspection is designed to point out to the buyer the repairs necessary
to bring the house up to a certain standard. Most contracts for house
sales have a contingency clause that allow the buyer to back out if the
inspection reveals major defects in need of repair. So, you can either
accept responsibility for the deftcts and eventual repairs, based on the
original price and inspection report, or renegotiate the price if you
believe the defects are more than were revealed prior to the inspection, or
back out of the contract based on the inspection report.
Talking to the bank person, her point was the appraiser just tries to
get the mortgage loan approved. And he assumes or overlooks the parts
which are in need of repair as other wise the appraisal would be lower
than the mortgage and hence, we wont be able to get a bank loan
It is indeed true that the appraiser works for the bank (even if you pay
the cost of the appraisal), because the appraiser looks out for the bank's
interests. An appraiser that consistently appraised property for less than
the selling (or mortgage) price would soon be out of a job, since no bank
would hire him.
So, though there is DEFINITELY a conflict of interest here, it is common
and accepted practice.
This make me think if the house was over priced in the first case. I
understand the bankers reasoning, but it means that in some ways I am
paying for the house to be completely fixed which is about 30k worth
of expenditure.
So, would you rather have the current owner pay $30K for repairs, then you
buy it for $50K more than the current contract price?
Again, what is the problem here? You have a good-faith estimate from the
inspector of what needs fixing, you have a ballpark estimate of the cost of
the repairs, and you have an appraisal of what the bank is willing to lend
you for the house in its CURRENT, UNREPAIRED condition.
How much weight age should be put on the bank appraisal. It almost
seems like they made the appraiser actually bump up the appraisal. Any
thoughts?
Talk with your realtor to find out if [s]he agrees that the house is worth
what you are paying for it. If in doubt, approach another realtor for a
second opinion. If REALLY in doubt, hire your own appraiser for an
"official" second opinion.
BTW, what does the govamint say the house is worth in its tax assessment?
Well the house is assessed at 267k. The reason for this problem is
that if the house is over priced then our negotiation does not really
make much sense.
But the appraiser agrees and says it's worth 295K (that's what he's
for) in its present condition. I don't see the issue either.
And the Appraiser says that the house is worth 295k if everything was
fixed. Hence the problem is that we feel the current price of the home
is 295k - cost of repairs.
No, he's telling the bank that it is really worth $295K and their
money is "safe".
So I would rather have the owner cut back the repair of cost from the
appraisal.
That's not the way it works. The appraiser is simply telling the
bank that the property is worth what they have agree to loan
(considering your down payment, LTV, etc.). Appraisals may come in
above the selling price, but not usually. It sounds like you want
your cake and eat it too.
--
Keith
.
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