Those Calls We Hate to Make

By
Real Estate Broker/Owner with Charlemagne International Properties BRE# 01147470

Today I sent a text message to an out-of-town seller.  I cringed as I typed the words and I knew she would be upset when she read it.  Procrastination was not an option.  The appraisal arrived and the purchase price exceeded the appraised value by 2.5%.

My seller's home showcased new hardwood floors, new granite and stainless kitchen and three remodeled bathrooms.  It is gorgeous head to toe.  The comps the appraiser used were so, so and included a short sale with missing appliances, a 1970 something original kitchen and similar baths.  The condition of all, including my client's, were rated the same,  "Average." 

The thousands of dollars my client spent upgrading her townhouse in 2008 rewarded her with enjoyment and it was a great selling feature.  However, it held no weight with the appraiser.  I'm sure we will be able to negotiate and move forward with the transaction.  The buyers will reap the reward of purchasing a remodeled unit at near original condition price, and my seller will move forward with her up-leg purchase.  The real estate world continues to turn--the challenge is to navigate the twists and turns, the negative and the positive with cooperation, education and resolution.

 

Norma Toering & Team RE/MAX Palos Verdes Realty
(310) 493-8333 / Office Phone: (310) 831-0800

PalosVerdesLifestyle - Nominated by Relocation.com as one of the top ten Los Angeles area real estate blogs. Ranked by Technorati in the top 1% of all blogs. As seen in the Daily Breeze newspaper.

South Bay Los Angeles cities I sell real estate, property, houses and homes in: Palos Verdes Estates, Rolling Hills, Rolling Hills Estates, Rancho Palos Verdes, San Pedro, Long Beach, Torrance, Lomita, Redondo Beach, Hermosa Beach and Manhattan Beach. Information is deemed reliable but not guaranteed.


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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Norma, there was a recent post about filing a formal complaint against the appraiser - a personal complaint - with the state licensing agency.  That would get his attention.

May 23, 2010 08:39 PM #1
Rainmaker
231,945
Sara Woolford & Steve Golson, ALHS
iTexas Realty Co. - San Antonio, TX

Hi Norma-

How disappointing for both you and for the Seller!  It is a blessing that the gap is not larger and that she can still move forward with her plans.

--Sara in San Antonio

May 23, 2010 08:40 PM #2
Rainmaker
211,572
Nathan Tutas
Tutas Towne Realty, Inc. - Davenport, FL
Your Central Florida Real Estate Expert

You are absolutely right, sometimes you have to just dig your heels in and look for a solution. If it's buried under a tree somewhere so be it...as long as you find it. I had the same thing happen a couple of weeks ago on the buyer's side. We offered 13k more than what the appraisal came in at. The seller moved the price down, we closed on time, and everyone still came away ok. Nature of the business. Good post.

May 23, 2010 08:41 PM #3
Rainmaker
1,796,324
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

It could be worth hiring your own appraiser.  Make sure he uses proper comps and send it to the buyers agent and make sure it gets sent to the Bank.  This is an issue that I cross early in the deal. 

If the home being sold is not a foreclosedd one or a short sale...I tell the buyers agents to make sure that the appraiser uses NON-FORECLOSED OR SHORT SALE COMPS!   I will even send proper MLS numbers for comps for the appraiser if needed!

May 23, 2010 08:41 PM #4
Rainmaker
263,650
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

I hope you get it figured out. The days when appraisals supported the selling price, now matter what it was, are over. Good Luck! Now go earn your commission!

May 23, 2010 08:43 PM #5
Anonymous
Anonymous
Anonymous

I have to tell you - you have painted a great picture of the service.  Wish the best for your seller and you.

May 23, 2010 08:48 PM #6
Rainer
112,873
Irina Riley
Blue Picket Realty - Woodland Park, CO
GRI, SFR, CNE, e-PRO, SRES

This is one of the problems we are facing with the appraisers, when they include distressed properties as a comps for upgraded and updated homes. Can you ask for the second opinion from another appraiser? Hope, it will work out.

May 23, 2010 08:49 PM #7
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Pat - We are working it out as she drives back from Colorado--she was there to pick up her daughter from college and have some mother-daughter fun.  I'm sure my little text message did not add to the fun factor!

May 23, 2010 08:54 PM #8
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Sara - You're right, it could have been much worse--we'll work with it.

May 23, 2010 08:56 PM #9
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Nathan - Real estate is all about solving the problems and finding solutions.

May 23, 2010 08:58 PM #10
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Nathan - I doubt the appraiser viewed any of the sold comps.

May 23, 2010 09:00 PM #11
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Wayne - I earn every commission--and I'm sure you do also.

May 23, 2010 09:03 PM #12
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Thanks for the kind words, Sarasota Choice Homes!

May 23, 2010 09:04 PM #13
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Norma Toering
Charlemagne International Properties - Rancho Palos Verdes, CA
Palos Verdes & Beach Cities Homes in L.A. CA

Irina - Looks like it will work out with a little movement from both sides.

May 23, 2010 09:05 PM #14
Rainmaker
1,087,893
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Norma-- I hear this more and more.  The appraisers are not giving as much value to upgrades as one would wish.  It is still a challenging market.

May 23, 2010 10:03 PM #15
Rainmaker
279,850
Gail C. Harris
Resource Network, LLC SFR, AHWD, ACRE, SMAR Board Director - Chesapeake Beach, MD
Reach the BEACH with Gail C. Harris (cell: 703.868

I really feel this, too, Norma for my sellers and buyers alike.  Appraisers in our area are gun shy.  So, not only are they low balling properties, this sets the tone for a buyer who is ready and able to pay what we all believe the property to be worth, yet makes buyers weary about the value after purchase and they're thought, "will it continue to slide"?  It's a challenging market, indeed, as Joan says.

May 24, 2010 08:43 AM #16
Rainer
156,549
Tom Boos
Sine & Monaghan Realtors, Real Living - Grosse Pointe Farms, MI

Sadly, this is a common occurrence these days.  A "sure-thing" appraisal is a thing of the past.

May 24, 2010 09:39 AM #17
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Janna Scharf
Keller Williams Realty Coeur d'Alene - Coeur d'Alene, ID
Coeur d'Alene Real Estate Pro

That is such an unfortunate situation, and unfortunately not uncommon these days.  I have a deal that imploded based on a bad appriasal.

May 24, 2010 09:40 AM #18
Rainmaker
101,809
Kim Darling
Keller Williams Westland Realty - Fresno, CA
GRI, "Your Home Team" Fresno/Clovis Real Estate

I just had a deal die because of the appraisal.  I truly believe the appraiser did not do his job on this home at all.  I looked at it from every angle and it was just plain bad.  The comps he used were not comparable at all!!!  Not in location, not in condition, nothing.  The deal fell apart, and luckily we got into another escrow, but it did cost my buyer over $700 for an appraisal and home inspection, that sucked!!!

May 24, 2010 09:53 PM #19
Rainmaker
156,510
Wendy Rich-Soto Team At Keller Williams Realty, LA Harbor
Keller Williams Realty, LA Harbor - San Pedro, CA
"Because IT IS all about YOU!"

It happens so much more than we'd like.  I am sorry for your seller because that is never a fun thing to have happen, when your heart and mind are set on the price that you have agreed to. 

May 31, 2010 03:13 AM #20
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Norma Toering

Palos Verdes & Beach Cities Homes in L.A. CA
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