Appraisal Came In Way Too Low

[Russell Gronsky]

Never thought this would happen but even in a hot, seller's market, Murphy finds ways to strike.

I bought a fix and flip in Feb of this year and while I was remodeling, I saw houses in the same development, with the same square footage, floor plan...everything, continue to sell at higher price points with no remodel. In fact, the exact same house as mine just sold down the street for $234K, 2 weeks ago. It was not remodeled.

On Thursday of last week, the appraiser came to do the appraisal for a conventional loan for my buyer. Now mind you, last 3 comps that are identical to mine sold for $229, $232 and $234. All were not remodeled. The appraiser appraised mine at $237 and it has been fully remodeled, top to bottom! I even threw in some premium things not found in any comps (LED can lights and quartz counter tops; they didn't cost me any more than normal stuff would and they look great). So my full remodel is only worth $3K over an un-remodeled place? The kitchen cabinets alone are worth more in added value.

I protested the appraisal but mortgage company told me to pound sand. My agent suggested I get my own appraisal. It's about $400. MY question is, is it worth the effort to do this? Will this change the mortgage company's opinion and approve the loan at the new appraised value (assuming the appraisal I pay for comes in higher than the 1st one)?

My other option is to break the contract and put the house back on the market. Not ideal since that's another 30 days at least before I can close but I'm confident I'd get a better appraisal/offer.

So, do any of you guys see anything I've missed? Should I push for the second appraisal? Break the contract and put the house back on the market?