I recently listed my primary residence, had a full price offer in 1 day. Comps were/are difficult in my area as I live in a rural neighborhood, large acreage, homes built as early as 2000, mine build in 2018. Only 2 comps in my area in the last 12 months, they were built in 2015, but totally different home style, finish, size, etc. Those comps sold in the $180-200/sq ft range. Mine is listed at $235/ft. So naturally I am worried about it coming in low.

My question is do you guys recommend preparing anything ahead of time to have available for the appraiser to make his job easier? I have original blueprints, builders invoices, receipt for solar system we installed last year, and information/costs on the upgrades we did to our home (white oak hardwoods, marble backsplash/countertops, built in fridge, etc.), sales contract. I don't want to annoy him or her but I also want to give him/her as much ammo as possible and be available if needed for questions. Thoughts?

Yes, always provide information for your appraiser. If those comps are lesser in quality of construction or condition, then you want to provide the appraiser information so he/she will make upward adjustments. Any recent upgrades, updates, information on high end finish out items, secondary structures, well, septic etc.

They will likely have to use dated sales or comps pretty far away if they are as sparse as you say. How much acreage?

We have 5 acres, lot sizes vary in our area from 3-10 acres.

Would interior photos of those comps suffice for showing the lesser quality?

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Those comps sold in the $180-200/sq ft range. Mine is listed at $235/ft. So naturally I am worried about it coming in low.

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The best comps sold $180-200/sf and you are at $235/sf? If you have no comps that indicate your $/sf should be $235/sf, how did you come up with that price?

There are many factors at play here besides price per square foot. Acreage, amenities, garage, swimming pool, cabana, out buildings, etc. None of those things are directly related to the gross living area of your home. It would be like buying a car based on the displacement of the engine. What about the mileage? The make and model? The actual condition?

There isn't enough information to give a good assessment of your situation.

Just email you directly aggie appraiser.

An update to this, appraisal came in at $215/ft, which is the highest in our area I have seen. The buyer thought that was too low and couldn't believe it so now they are going with another lender so they can get a second appraisal that hopefully is higher. Seems like a strange move but it must mean they really want the house. Any thoughts on this? Aggie Appraiser?

Did It appraise above purchase price?

Edit: reread the thread, looks like it didn't. It does show their interest, but that seems significant enough that it would be hard to overcome with another appraisal and limited comparables.

wsteed311 said:

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An update to this, appraisal came in at $215/ft, which is the highest in our area I have seen. The buyer thought that was too low and couldn't believe it so now they are going with another lender so they can get a second appraisal that hopefully is higher. Seems like a strange move but it must mean they really want the house. Any thoughts on this? Aggie Appraiser?

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Sorry, I was busy when you emailed and didn't respond, then forgot all about it.

This appears to be a situation where your property is superior to the majority of the comps in numerous categories. This is sometimes called an over-improvement or super adequacy. What the terms mean is that your home may be improved past the point where the market demands, which results in the improvement offering less value, maybe much less, than the cost of the improvement.

Solar panels can be a good example of this phenomenon. Many times the buyer's don't really care or even want them and they may not receive any adjustment at all even though they are expensive and provide some benefit.

It's frequently a challenge to do an appraisal on a property which is the most superior property in the neighborhood, which it sounds like this may be the case in your situation.

yeah, but its a data problem, not a value problem. He found a buyer willing to pay in 1 day.

It is a value problem if the buyer is borrowing - the lender has to agree to the value.

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He found a buyer willing to pay in 1 day.

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Oof. One possible buyer does not a market make.

I'll give you an extreme example, the neighbor behind me sold their property for near $200k more than market rate due to some VERY weird circumstances. It's a very nice house, but nothing extraordinary for the neighborhood.

One lunatic just had to have it, the seller had their job transfer cancelled. They wanted desperately out of the deal and the buyer, with cash to burn, was willing to pay whatever the price for the home. Things kept getting nuttier and nuttier until they were way beyond anything reasonable for the area.

The new owner just lit $200k on fire. No bank is going to underwrite that, nor should they.

It's a market outlier, and will be for years I suspect.

JJxvi said:

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yeah, but its a data problem, not a value problem. He found a buyer willing to pay in 1 day.

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He found a buyer without the ability to pay in 1 day.

All the buyer has to do is increase his downpayment to the point where the lender is satisfied that the loan is protected.

Yup, if all these "willing buyers" can write a check then giddy up.

Eh, whatever, I'm not claiming the value conclusion wrong. It just has to be supported by the data. It just doesn't quite sound (to me at least) like his house is probably the equivalent of solar panels nobody wants based on the limited info we do have.

Thanks to all for the feedback. They decided they are going to go with another lender to get a second appraisal so we will see what happens. We aren't in a huge rush so we will let it play out. I also checked with my solar installation company and they said they are able to remove the system and install on our new home if needed. It would cost us for the labor but may be a future negotiation point if the appraiser doesn't give us any value for it.

wsteed311 said:

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Thanks to all for the feedback. They decided they are going to go with another lender to get a second appraisal so we will see what happens. We aren't in a huge rush so we will let it play out. I also checked with my solar installation company and they said they are able to remove the system and install on our new home if needed. It would cost us for the labor but may be a future negotiation point if the appraiser doesn't give us any value for it.

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Keep in mind that if the appraisal did give the solar system some small contributory value removing it may cause problems with the appraisal. It probably would be best to have this sorted out in the contract prior to presenting the contract to the second appraiser.

It is possible that a different appraiser could use a completely different method of determining the solar system's market value and it could contribute more value in a different appraisal.

Good luck.