Hey Susan, I am buying a Boston Condo and my appraisal didn’t come in. What are my options?
The Boston condo market is rising rapidly causing many condos to go over asking price.
How are the appraisers keeping up with the market? Appraisers can typically only use comparable properties that have sold in the last 6 months. Inevitably, this combination is causing some condos not to appraise.
So what does this mean?
Recently I had a situation where a condo did not appraise. We were one of 3 offers. Our terms were excellent and, although we were not the highest offer, we won out in the bidding war. This condo was located on one of the most desirable streets in The Fenway.
All was good until I received a call from the lender stating that the appraisal did not come in.
Fortunately, Boston is a small big city. After checking out what was under agreement in the area, I was able to locate 2 properties that were on the same street. A quick call to a listing agent I knew to verify that the condo had gone over asking. I could not and would not ask the price. One comp down.
Next I asked for the listing agent’s help as he is a specialist in the area. Coincidentally, he had the buyer on the other condo and was able to verify that the condo went well over asking.
At the home inspection, the home inspector mentioned that he had recently had a home inspection next door with someone in my office. Again I was able to verify that this condo was going for over asking. Both of these offers were cash and did not need a bank appraisal.
My buyer was putting down a very large amount and was in a situation where she could accept the appraisal because of her large deposit and move forward with the sale.
Fortunately, we had seen enough properties and she was confident in her decision to move forward.
But what happens if you are not putting down a large amount? What are your options?
- Go back to the seller with the appraisal and try to renegotiate. If the appraisal is only slightly lower than the accepted offer price this is a viable option.
- Put down more money. Make up the difference with more money down. You would need to be confident that the condo was worth the difference.
- Use your appraisal contingency and back out of the sale.
The appraisal process is not perfect and its rare that an appraisal does not come in. Twice in 11 years for me. Both in competitive situations.
