In a market where getting properties to appraise for sale price is a common challenge faced by agents, I found myself on the other end of the spectrum this week.
I have been working a Short Sale on a condo in a highrise building and this week the Short Sale lender came back with an appraisal that was over $40,000 more than the offer that was submitted. This caught me entirely off guard since both the buyer's agent and I thought we were "on target" in the contract price.
I make it a policy not to call out individual lenders in my posts since many of them share similar bad practices, but the lender in this case was exceptionally unwilling to consider that the appraisal could possibly be wrong. Until confronted with evidence they couldn't ignore.
A bit of research on my part showed several bad choices made by the appraiser. First, the comps chosen were not the "best" nor "closest" comps available. There were an adequate number of comps in the same building as the sale unit, yet the appraiser chose comps from other properties that were not comparable in terms of amenities, location or age. Also, the appraiser ignored recent REO sales in the building which were sold by the same bank that was making the decisions on my short sale property.
I faxed a copy of the comps to the bank along with an explanation of why the appraisal was flawed and how their failure to consider this evidence would result in a lost short sale for this unit, a lower REO sale price (based on their own recent REO sales in the building) and lower return for the investor.
The end result? Within 48 hours the appraised value of the condo I had listed was lowered by $35,000, the short sale offer was revised and approved and we are moving toward a closing in the next couple of weeks.
So even when it appears hopeless, just dig deeper... sometimes the info that lies beneath the surface can be enough to pull a deal killed by a bad appraisal from the fire!