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Re: appraisal help!!!
The bank appraisers generally look to more recent comps... ideally, they want to look at sales of homes that sold in the last 3 to 4 months, but generally won't go back further than 6 months IF there are an adequate number of comps. (I've had sales in small co-op developments for example, where there was only one other sale in that development in the past 6 months, and then the appraiser had to look back further... they generally want at least 3 comps).
But last year was a different market than this year. Even when doing a market analysis for a customer who is considering listing, I try to limit my comps to the last 6 months, because that is what an appraiser would do. I've assisted people in challenging appraisals (for refinancing, mostly), and the various banks' rules for challenging the appraisals by providing your own comps always state that the sales used has comps must be no more than 6 months old.
How did you analyze the comps? Did you speak to your agent about it? I always look at similar style (cape, split, ranch, etc.) homes in a neighbhorhood (always same town AND school district), and then make adjustments up or down for things like number of rooms (beds, baths), lot size, amentities/features (basement, garage, central air), condition/renovations, location (cul de sac v. busier road, midblock v. corner) etc. So are you sure the comparable homes you are looking at for the last 6 months are the same size and condition of the home you are buying? Are you sure they are as updated? How much lower are the comps than the purchase price of the home you are buying? If it's a very small difference (e.g., $10K on a $400K+home), it probably won't matter. If we are talking like a $50K difference, that's an issue.
ETA - If the appraisal doesn't come in, it's not the end of the sale, necessarily. The seller can always come down in price. Or, if you are putting at least 20% down, you can kick in some extra cash (although not sure why a buyer would do that when a home doesn't appraise). The appraisal is really there to protect the bank, but it can also give you peace of mind that you are not overpaying for the home. If you are getting an FHA loan, the appraisal stays with the house for a certain period of time (used to be 6 months, may be 4 now, so I am not sure), but the point is that the seller would encounter the same appraisal problem with another FHA buyer -- and even if you are not getting an FHA loan, if you think the appraiser's comps were valid, it would likely be an issue with another appraiser anyway. So it would be in the seller's interest to renegotiate at this point.
Message edited 4/11/2012 8:47:59 AM.
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