Appraisal Scares on Exiting your Flip

[Martin Sterling]

A quick note on Appraisers. 

So the buyers appraiser for my flip appraised it for 220k.

We already agreed to sell at 230k to the buyer. 

If a 220k appraisal was the final word, The buyer wouldn't get funding. They would need to come out of pocket the difference, 10k. Its an FHA buyer. Thats not happening no matter how bad they want the house unless they sold a kidney on the black market. I'm already doing a seller concession at closing to help their costs.

The deal would be dead. I was upset.  If I lowered to 220k, I'd be taken a serious Loss. 

We looked at the buyers appraisal. This gentleman didn't count 1 of 3 bedrooms in the first unit, and 1 of 4 bedrooms in the second unit along with 1 of two bathrooms. He didn't even include the sqft of the 3rd floor. He had the second unit down for 1200 sqft, when it's 1700.

He dropped the ball big time. If we didn't catch that, I'd be beat.

I know there has to be investors taking L's with buyer appraisers that screwed up. 

That situation just scared the crap outta me. 

He missed two bedrooms a bathroom and 500 sqft. Basically, another apartment. 

It's almost like he went to the wrong house. 

Do you other investors see this a lot?

[Russell Brazil]

@Martin Sterling Im not trying to be mean...but either you or your agent dropped the ball. Part of the job of your listing agent, or you if you are FSBOing is to cut these mistakes by an appraiser off like that before they happen. You should be providing detailed comps to the appraiser along with detailed information on your property, and notes about why your property compares to the comps, or how they are dissimilar. You should also understand that accepting an FHA offer means that appraisal will stick to the property for 6 months.

You shouldnt need to get to the point where you are contesting an appraisal, as the mistakes on the appraisal wont happen with a good listing agent.