We Fixed a $80K Low Appraisal! How?

Recently one of our sellers had a buyer whose lender ordered an appraisal on the home.  It came back $80,000 LOW!  Can you imagine all the sudden feeling like you just lost $80,000?  We have heard about this happening to sellers all year long.

What is an appraisal?  Its an opinion of value. There is not an absolute formula for an appraiser to use when coming up with a value. That means the value will not always be the exact same value no matter who does the appraisal. But when you get a bad one what do you do?

Let me show you what we did:

This is the scenario we found ourselves in, the odds were stacked against us:  The agent representing the buyer was an appraiser for 30 years.  He felt like the appraisal was good.  The appraiser thought the value was accurate. The lender thought it was valid. We knew it was bad.   

What it takes:   First, years and years of experience was key.  You don't all the sudden become superman when faced with something like this.  We were up against 2 appraisers with 30 years of experience each. Next, we evaluated the appraisal. We knew going into this that an appraiser is going to have a hard time admitting they were wrong.  Its their opinion and they like to stick to it. So we had to point out errors.  There were missing comparables, there were values not properly adjusted, etc. After we had our data, we had to give this to the appraiser, the lender, and the buyers agent and argue our points.

   Then we wait. During the waiting period you have to be great at communicating and keeping all parties in the game. Its an emotional process.  People get tired and want to give up. Our goal was to go through the process and keep people in the game. This process took almost 2 weeks by the way.

The answer from the lender?  We will raise it $18,000. The buyer tries to negotiate the price lower. Okay, we still are short. So what do we do next? We knew our list price was accurate so the seller bought their own appraisal. It came in just fine, right where it needed to be. We submitted to lender knowing that the lender would not accept it, but hoped to point out that their appraisal was still not accurate.  

The lender decided to do another appraisal at no cost to the buyer since we proved there were too many discrepancies.

  The results? The appraisal came in $10,000 higher than our appraisal! The buyer now had 2 appraisals that proved our value and our point that the first appraisal was not a good appraisal.  

People ask how we sell a home for more than it can appraise for? "How can you fix low appraisals?"  It takes a lot of work, time and experience to get that job done.  There is no one secret....just lots of practice and experience.

  That's one of the reasons why UtahDave.com's Neighborhood Experts sell 400% more than the average agent.  They are the only ones I know of that get results like this.