Real Estate Appraisal Too LOW; How Do I Keep the Deal Out of the TOILET?

We talked on the previous page about how an appraiser arrives at Market Value.

"Fair Market Value" and "Fair Value" are commonly used accounting terms in the U.S. and they are synonymous with "Market Value" when talking about appraisals.
So, whatever term is used, they mean the same thing.

As the seller, how do I prepare for an appraisal?

Have your RealtorŪ meet the appraiser and bring the comps they used to justify the selling price!

It amazes me, how many real estate agents don't do this!
It's much easier to get an appraiser to accept your comps before they have come to a decision.

In 20 plus years as a RealtorŪ, even before I got my appraiser's license, I never had a low appraisal just by doing this very thing!

Some people will tell you that the appraiser is not coming to give your house the white glove test, and it won't make any difference if there are underwear laying on the bedroom floor or dirty dishes in the sink.

WRONG!

Yes, the appraiser is there valuing the real estate, not commenting on your housekeeping, or lack of it.

However, they do have to report on the upkeep of the physical aspects of the house and assign a value to it.

An appraiser will determine if the structure is well maintained, average, or subject to deferred maintenance and price accordingly.

It could make a considerable difference in the valuation

If your real estate is older, and you have not done any remodeling or updating, then the appraiser will find the property subject to functional obsolescence
This means that your house does not have the same "functionality" as the comps, like updated kitchen cabinets, built-ins etc.

Without spending lots of money, there is no way to correct this.
That's why your house should sparkle like a new pin so you don't also suffer from "deferred maintenance".

Mow the lawn, clear up any trash lying around your piece of real estate.

Remember, just as for your real estate buyer, FIRST IMPRESSIONS COUNT!

If the appraiser leaves your property thinking it'sa little "gem" and the "comps" are close, then that could easily make the difference between getting your sale price or not!

If it's relatively close, there are several things that will possibly help to bring it up.

Have your RealtorŪ run the comps again.
(This should not have been necessary if the real estate agent had met the appraiser with acceptable comps to start with!)
The appraiser may have missed a suitable one, or taken into account one that is not really a true comp.
You have to look at what boundaries they used for your neighborhood.
This can happen when the appraiser is not well versed in the local area.

Go round and check the comps the appraiser used.
take note of any that may not be in the same "quality" of tract.

Check that the square footage of the structure is correct.
Sometimes the appraiser will disallow the extra space from an addition or expansion just because it does not show up on the tax rolls.
If you, or a prior owner, did add on with a signed off building permit that square footage counts!

Make sure that the plat map is correct and the real estate appraiser is not shorting you on your acreage.

Determine if they are taking into account any difference in the quality of construction on the comps and adjusting accordingly.

If you have updated or remodeled, check to see if they have allowed a sufficient dollar value for it.

Well, you can try to talk to the appraisal reviewer.
Most lenders have an in house review done on the appraisal.
You, or your real estate agent, can try to show why the value should be adjusted upwards (Good Luck here!).

You can lower the selling price to the appraised price.

If the buyer is willing to pay the higher price, you can offer to carry back a second in the amount of the difference.

The buyers can come up with the difference out of their own pocket if they are still willing to buy the house<

You can ask the lender if they will accept another appraisal.
If you feel that the original appraisal was really out of line then you could pay for a second appraisal yourself and submit it to the lender.
There is no guarantee they would accept it, and you can bet the appraisal reviewer will go over it with a fine tooth comb!

Appraisal costs are NEVER based on the selling price!