Turnkey Properties Appraisals

[Manuel Savorelli]

Hey board, I'm in the process of purchasing 2 turnkey properties but the appraisals came in on the low side, like $25k below purchase price on each. They're justifying by saying comps used were for non-improved homes while improved homes weren't being sold, therefore couldn't be used as comps. What do you suggest I do without jeopardizing earnest money, etc? Do I have ground to stand on if I try to drop purchase price? TIA

[James Wise]

Originally posted by @Manuel Savorelli:

Hey board,

I'm in the process of purchasing 2 turnkey properties but the appraisals came in on the low side, like $25k below purchase price on each.

They're justifying by saying comps used were for non-improved homes while improved homes weren't being sold, therefore couldn't be used as comps.

What do you suggest I do without jeopardizing earnest money, etc? Do I have ground to stand on if I try to drop purchase price? TIA

 Your contract should have been written in a way that a low appraisal shouldn't be something that should cause you to loose your EM. In the future I recommend writing "The property must appraise for at or above purchase price" as a contingency in all of your deals.

A house appraising $25k under your contracted purchase price tells me your buying a bad deal. I'd strongly consider walking if they are not willing to reduce price. It sounds like they are in over their head on the sale. Someone is gonna loose money on this deal. Make sure it's not you.