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  1. #1
    Amberly Guest

    Unhappy House didn't appraise at selling price

    What is the name of your state? What is the name of your state? Maryland


    We are selling our townhouse and just found our that it appraised about 4% below the selling price. This strikes me as odd because when we bought it, it appraised for $4000 over our purchase price. I have two questions:

    Is it likely that different appraiser might vary 3-4% in his assessment?

    It should be noted that we received two offers for our house within a week, one was $4500 above the appraisal price and one was $7500 above appraisal price.) I know in this booming market it is hard for appraisers to find comparables, especially as ours is an end-of-group and one of the more expensive in the neighborhood, but there were a few in our immediate neighborhood that sold for more than our appraised value.

    I'm also wondering about whether appraisers look only in the immediate neighborhood for comparables. This strikes me as a potential legal issue, because our development is now mostly African-American while across the commercial strip, in a white neighborhood, the *exact same* Welsh-built townhouses typically sell for $10-20K more. It annoys me that an appraiser can have so much power to keep housing prices down, and I wonder if it is even legal given the implications.

    Is an appraiser obligated to look at comparables only in the immediate neighborhood, or could the exact same houses in a nearby neighborhood serve as comparables as well.

    Thanks, Amberly
  2. #2
    HomeGuru is offline Senior Member
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    Re: House didn't appraise at selling price

    Originally posted by Amberly
    What is the name of your state? What is the name of your state? Maryland


    We are selling our townhouse and just found our that it appraised about 4% below the selling price. This strikes me as odd because when we bought it, it appraised for $4000 over our purchase price. I have two questions:

    **A: it does not stike me as odd because the current appraised value of the subject property has NOTHING to do with your purchase price or the appraised value at the time of your purchase.
    *************



    Is it likely that different appraiser might vary 3-4% in his assessment?

    **A: it is possible.
    *********


    It should be noted that we received two offers for our house within a week, one was $4500 above the appraisal price and one was $7500 above appraisal price.) I know in this booming market it is hard for appraisers to find comparables, especially as ours is an end-of-group and one of the more expensive in the neighborhood, but there were a few in our immediate neighborhood that sold for more than our appraised value.

    **A: maybe the appraiser did not have the most current comps. In whcih case you and your Realtor can present the comps to the appraiser.
    *********


    I'm also wondering about whether appraisers look only in the immediate neighborhood for comparables. This strikes me as a potential legal issue, because our development is now mostly African-American while across the commercial strip, in a white neighborhood, the *exact same* Welsh-built townhouses typically sell for $10-20K more. It annoys me that an appraiser can have so much power to keep housing prices down, and I wonder if it is even legal given the implications.

    **A: what implications? Appraisers are not required to go outside of the development or neighborhood area if there are enough comps to justify the final value based on the market data approach. And appraisers do not ask what kind of people (ethnic background, religion, income etc.) live in the properties used as comps.
    *********

    Is an appraiser obligated to look at comparables only in the immediate neighborhood, or could the exact same houses in a nearby neighborhood serve as comparables as well.

    Thanks, Amberly
    **A: I suggest you talk to several real estate appraiser organizations and inquire as to their standards of practice.
  3. #3
    Amberly Guest

    Re: Re: House didn't appraise at selling price

    Originally posted by HomeGuru

    **A: I suggest you talk to several real estate appraiser organizations and inquire as to their standards of practice.

    It's very naive to assume that the appraiser isn't familiar with the ethnic make-up of a neighborhood. The implications are that mortgage companies and appraisers can keep housing prices depressed in minority neighborhoods, despite evidence that the exact same houses in the community sell for $10-20K more and despite the fact that buyers are willing to pay more than the appraised value. The real estate industry does not exactly have a clean record when it comes to "fair housing".

    Amberly
  4. #4
    HomeGuru is offline Senior Member
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    Thank you for your comments and good luck to you.

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