Yesterday, I learned from my buyers' lender at Bank of America that the appraisal for the home that they have under agreement came in almost 100K below the contract sales price. Now, I have heard of appraisals coming in lower than the contract price, but never this much lower. Obviously, this is a problem.
We have begun the necessary steps to have the appraisal reviewed but my main concern is that the appraiser is from Lowell MA and although licensed in NH, I would be willing to bet that he rarely (if ever) does appraisal work in Exeter NH. The comparables that he used in the appraisal weren't even close to the subject in quality, size or location. The key word here is location because the property that my buyers want to buy is located in that "magic" Phillips Exeter Academy radius making it very desirable and good also for re-sale down the road. Probably, we should have been tipped off when the first words out of his mouth when he entered the property were, "Is this an REO or short sale?"
Hopefully, we will be able to resolve this issue between having the appraisal reviewed and perhaps having to renegotiate the purchase price. We shall see.
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