Appraisal came in WAY UNDER.. thoughts please

[Alex Wasilchuk]

Hello BP,

The SFH I'm under contract for $88,000 had the appraisal come back approximate $20k UNDER that price. My agent is going to see about getting a second opinion paid for by the seller. I'm in limbo now.

Let's say a second appraisal comes in way under, what would you experienced investors do? Bail and cut losses on some fees already paid for (inspection, appraisal, etc)?

The SFH is currently rented for $895 and runs through August 2020. I would have been doing 25% down with 4.5% interest rate. My numbers were looking like a cashflow around $200/mo.

Any insight and advice is greatly appreciated. Thank you!

[Bill B.]

If they are good comps it sound like the properties worth about $70k and that appraiser just saved you from overpaying $18k. You should buy him lunch and move on.  Maybe ask yourself and your realtor how you both got “tricked” in to offering 30% over the true value. Can your realtor not find any of these $68-72k buildings for you to buy?