do the banks appraise low on purchases to protect their investment?
2006-12-27 12:53:42 · 9 answers · asked by getmywayjay 1 in Business & Finance ➔ Personal Finance
If you haven't already closed on your home, you can definitely use the bank's appraisal as a bargaining tool and lower your offer. Keep in mind, different appraisers can value the same property completely differently. As for banks protecting their investment, they are basing your loan off of your credit score and other variables, not necessarily the appraised value of your house. The market will inevitably fluctuate over time, but if you are locked in to a 30 year fixed interest loan, they'll get their money either way. The only real question is whether you will be able to turn a profit when it comes time to sell.
2006-12-27 13:07:33 · answer #1 · answered by JmpMstr 2 · 0⤊ 0⤋
Often the bank will use a real estate agent to do a 'drive-by' appraisal. They'll look at the location, etc of your home and the homes around you. This isn't a full appraisal. The bank appraisal came out much lower than I had expected on my home, so I requested a full appraisal be done. It came out quite a bit higher than the original bank appraisal.
2006-12-27 21:10:51 · answer #2 · answered by matty.. 4 · 1⤊ 0⤋
I would suggest getting another appraisal. It all comes down to opinion when valueing your property. You need to find a completely unbiased appraser to give you that value. But the way they make their adjustments are under no control of you, mainly based on experience and schooling.
In the current market in Cali, it is sometime normal for a property to be overimproved, so a house worth 800K, might actually appraise for 700K due to the improvements added. A buyer in that case would have to come up with the difference in terms of a downpayment to cover this additional value.
I would say that values of real estate across the country will continue to adjust due to investors entering the market and artificially inflating the real estate values.
2006-12-31 00:02:15 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Lenders tend to use only appraisers that are trained to handle their appraisal requests. Your appraisal may come in lower than anticipated because of this (Wells Fargo, CountryWide all have in house appraisers). You can call your local title company and have them do a property search with comparable properties to help you estimate the value, or call another appraiser from the yellow pages.
2006-12-28 02:04:38 · answer #4 · answered by Martini Babee 4 · 0⤊ 0⤋
Banks do appraise low just in case. This is for their own protection, yes.
2006-12-27 21:28:08 · answer #5 · answered by Ambassador Z 4 · 1⤊ 0⤋
Most appraisers won't appraise a house for much more than you're paying for it. They know that's all it needs to appraise for, and they won't go out on limb. It very well could be worth more than you paid.
2006-12-27 20:59:58 · answer #6 · answered by Sharon B 2 · 0⤊ 0⤋
Appriasals done for banks are generally pretty conservative. The homework you did when coming up with your bid on the property is probably a better indication of the home's worth.
2006-12-27 21:02:06 · answer #7 · answered by nickfromct 3 · 1⤊ 0⤋
the bank uses market value. Does it really matter? It only matters when you want to sell your home. Otherwise, enjoy it.
2006-12-27 21:23:45 · answer #8 · answered by Anonymous · 0⤊ 1⤋
I agree with Sharon.
2006-12-27 21:01:10 · answer #9 · answered by Sweetharttt 7 · 0⤊ 0⤋