Bank Overthinking Quad Value?

[Account Closed]

I am representing a buyer-client who has a quad under contract. The bank is having trouble justifying the value of the property because of lack of 'established marketability' and good comps in its rural location. We sent the bank a recent appraisal that was performed at the request of the seller prior to listing. The bank claims the comps are mostly inferior to the subject property, but also that they are in a different area - a more expensive area within 20 miles. Shouldn't that be a positive indication of the appraised value?  The property has a 13 year history of being fully occupied. Is that not validation of 'established marketability'?

[Jon Holdman]

Hard to comp properties can be really troublesome.  I took a loss on a deal for just this reason.  Replacement cost is one method to determine value, but that's not commonly used for making a loan.  The third approach is income.  You can try to find other income properties in the area, determine cap rate, then see what value that produces for your property.

The bank is all about managing risk.  You can try another bank, but you have two appraisals that have similar issues.  Another bank may have the same problem with this property.  You could view this as a way to renegotiate price with the seller.