Wow! Contract Price $420,000, appraised value $334,000. The current re-negotiated contract price after appraisal $334,000. I would think a thank you letter is due to an honest, ethical real estate appraiser.
OK, this is the story of my Brother and Sister-in-law moving to Longwood Florida, from Southern California. They are scheduled to close September 2009.
Although you might not typically see this wide of a range between the contract price and the appraised value, in this case the situation was perfect for an inflated contract price, a FSBO and a buyer without an agent. Now, although I understand the desire to save money and I don’t recommend purchasing a home without an agent in an unfamiliar market, I would at least recommend consulting an appraiser before submitting an offer. Especially if you are paying cash and an appraisal will not be required for lending purposes.
In this case it appears that all is going to work out, but it could have been a lot worse. My brother and sister-in-law had already sold their house in California and were on their way across county when they received this information. Had the seller not been willing to accept the appraised value, things could have been a lot different. (This of course is a short version of a long story).
I’m writing this blog because I think it’s important to note that the appraiser is not only looking out for the Lender/investors best interest, he or she is also protecting the buyer.
Thank you, we'll be in touch!