Low appraisals kill sales in today's Real Estate market 2

How to keep the transaction together when the Real Estate Property appraisal comes in low.
An appraisal is a snapshot of the value at a given moment --
an opinion based upon objective data. The data is open to
interpretation, however. Who's to say which appraiser's value is more
accurate? Even more importantly, is the appraiser's value more
accurate than the amount that a qualified buyer elected to offer?

The crux of the issue is estimating the value for various
improvements. For example, two properties may have exactly the same
floor plan and virtually identical amenities. One has a pool and no
view and the other has a view but no pool. How much does the pool or
the view add to the property? If the appraiser has no comparable sales
with a view or a pool to work from, he or she will have to guess the
value of those amenities. This is just one example of how appraisals
can differ substantially based upon the fact that the appraiser has to
estimate those values. This is also the same challenge that online
valuation models encounter.

One of the best strategies to circumvent getting a low appraisal is to
make sure that either the listing agent or the buyer's agent provides
the appraiser with the most complete set of comparable sales
available. Many times the appraiser is relying on closed sales data
and may not include properties that are still under contract. Be sure
to include both sets of data, even if the appraiser elects to use only
closed sales.

It's also imperative that the comparable sales data be as detailed as
possible. Determine if there was a virtual tour for each of the
properties that you included in the comparable sales. If so, include a
link or any pictures that are available online. If the pictures are no
longer available, contact the listing agent to see if he or she can
provide them. The more data you give the appraiser, the less likely
you will be to have problems.

When prices are declining, appraisers tend to be very conservative.
Since the buyer generally pays for the appraisal, most lenders will
provide the buyer with a copy if asked. It's an excellent practice to
see what comparable sales were used in the appraisal. Sometimes,
out-of-area appraisers will select comparable sales that are in two
completely different market areas, even though they may be close to
each other geographically. There may be new comparable sales since the
appraisal was completed. If this is the case, submit the updated
comparable sales to the lender along with a letter explaining the
reasons the property should be appraised for more.

Bottom line: Avoid these hassles by making sure that the appraiser has
the best comparable sales available prior to making the appraisal.