Should the Buyers Agent challange a short appraisal?
Central Florida real estate is bouncing back faster than any other area in Florida. Many times, comparables are lagging behind, which is causing some properties to not appraise for contract price.
Not long ago, one of my contracts received a short appraisal. As a registered appraiser, I already checked the comps and knew that the appraisal would be a stretch. Buyers just loved the house and all the upgrades. Yes, it was at the high end of the market.
When the appraisal came in at $20,000 less, we asked the seller to reduce the price. Listing agent threw a fit, and told me that I better challenge the appraisal. OR ELSE…
First of all, the appraisal was pretty accurate. There were no loose ends or holes to poke at. But most importantly, is it really my job to challenge the appraisal? Of course not. As an Exclusive Buyers Agent it is my job to get the price as low as possible for the home buyer…not to try to raise the price for the sellers benefit. Especially since the appraiser already said the property is worth less.
The listing agent threatened to sell the house to another buyer…if I did not “do something” with the appraiser. I refused. IT IS NOT MY JOB TO RAISE THE PRICE. My job is to convince the seller to lower the price. Yes, just lower the price and there will be no problem.
War was on.
The listing agent took it upon himself to challenge the appraisal with comps from a different community that was a step up and had nothing in common with this property. This agent was simply off the mark on value. He was also off the mark in thinking that my buyer would simply cough up the difference in cash.
The appraiser turned a deaf ear and eventually the seller took the lions share of the shortage and reduced the price. Buyer paid a few dollars more.
Letting the buyer pay more out of pocket should be a last resort. A good Buyers Agent will never sacrifice the buyers wallet to keep the listing agent happy.
So here is my “buyer-expert” opinion:
- I have yet to see anyone challenge an appraisal and win. Appraisers will never admit that they are wrong, even if they are.
- Why is it that most agents think that when the appraisal is short that having the buyer pay half the deficit is somehow “fair”. I think “fair” is when the purchase price matches the certified appraisal. Thats whats truely “fair”.
- A good listing agent should know the house value before they list the property. They should also prepare the seller for a haircut should the appraisal be short. The burden for a short appraisal should should rest on the seller, not the buyer. This is not a a 50/50 proposition…it is the buyer paying fair market value for a property. Nothing more.
For expert buyer representation call Buyers Broker of Florida 407-539-1053.