2nd Appraisal - Core Logic

[Gregory Childs]

We have a SFH that we have rehabbed under contract (C transaction) for $150K - due to close in 10 days or so. The buyer's mortgage company had an appraisal done two weeks ago that came in at $154K.. all was great. When the underwriter reviewed the deal he ordered a second appraisal, based on the fact that we have owned the property less than 6 months - the second appraisal came in at $130k (which is ridiculously low).

So we called the bank and asked for a copy of both appraisals (need to get a release from the buyer). However, the bank says we must adjust our selling price to $130k or they will walk away from the deal. Which I suppose is their prerogative.

My issue is that the bank also said that the $130k appraisal will get entered into Core Logic and if we want to deal with any Fannie/Freddie lender the appraisal will be in the system for six months and nobody will lend above that number. So, in his words, it is either drop the price to $130k or wait six months. Neither option is appealing!

Has anyone else faced this dilemma and if so how did you handle the situation and what was the resolution.

Thanks,
Greg

[Justin S.]

Greg-

What happened to your deal? Did you find a work around for the low appraisal?

[Steve L.]

Option C - challenge the 2nd appraisal and the comps they use. The first appraiser should do that.

[Gregory Childs]

We negotiated a compromise - but it did not favor us particularly. We wanted to close the property and did not particularly want to walk away. Foretunately we had a good profit margin so we could afford to eat some of our deal.
It doesn't make it any easier. We're still a little grumpy.