Second Appraisal..

[Greg P.]

Hello all. This has come up a few times in our rehabs, and I've been pretty worried because we had a property in the past where the buyers backed out due to low appraisal. Has anyone dealt with the 2nd appraisal coming in low and how do you deal with it? Is it a good idea to meet the appraiser at the property? I'm sick and tired of these appraisals..

[Mark Yuschak]

Curt Davis, when a buyer is using FHA financing, the choice is not up to the bank. It's an FHA rule that a second appraisal be done if the seller's purchase price was for less than 50% of the resale amount.

To mitigate these problems I remove the key from the lockbox as soon as the house goes pending. That way I never run the risk of an appraiser going in without my consent (especially if the buyer's agent gives out the code...I've had that happen before). I then personally meet the appraiser at the house and walk him around to make sure he's clear on the improvements made, etc. Before he leaves, I politely give him a folder containing a list of the improvements and comps. I also ask him if he has a copy of the PA (they always do, but it subtly reiterates what I'm getting at without talking numbers).

On the second appraisal I do the same thing. The only other thing I add to my dialog with the appraiser is that the 1st appraisal came back just fine and he shouldn't have any problems. I leave it just at that.

So far, this method has treated me well. I've never had an appraisal issue.