Bank Appraisals aren’t always accurate, of course that’s what were going to say when their numbers aren’t what we’d hope them to be. Honestly speaking Appraisers and Realtors analyze homes using information, but interpret in different manners… Realtors use the information gathered to determine the best market value a property can be sold given recent market conditions. An Appraiser answers to Lending Institutions and with the present financial environment, they must follow stringent guidelines.
I was recently involved with a transaction where the value of a property as determined by an appraiser and myself became a topic of discussion. The property in question was priced accordingly and was well received in the market, garnering multiple offers in a two day period. After carefully reviewing each offer with my client and explaining the positives/negatives of each offer, my client made a decision. My seller was excited to be through the process in a short period of time and the buyers were happy to have their offer accepted. There are several steps taken prior to receiving bank commitment on a mortgage; one of the more important being the review of the property by a Bank designated Appraiser. They use much of the same tools used by Realtors, but view things differently. And as with all things in business and in life, Murphy’s Law came into affect… Nothing that couldn’t have happened on any other transaction, but the appraiser’s used different comparable properties and his ending property value was less than the highest offer, the accepted offer.
At this time you, the seller, needs to understand the choices that can be taken in the transaction. You must make one of the following three decisions… 1. Be firm and not reduce cost, asking the buyer to put additional monies towards the purchase or walk away 2. Negotiate with the buyer and possibly split the difference or 3. Accept the decision and advise the buyer that you will accept the Bank Appraiser’s value as the purchase price. Fortunately, I worked with a very good Buyer Agent and her clients understood the value of the home; my Seller also believed the in the buyer’s integrity and split the difference.
Its important to understand the risks involved in selling your property and to understand that issues may arise that are beyond ones control. However if you are working with good Realtor® (*Me Hopefully), in the end you will achieve the goals you wished to achieve!