Are appraisers required to pull homes not listed in the MLS? What are my chances of the appeal being revised?

Question

I am having a purchasing/clising issue as a buyer on a new build home in a new community. The home appraised 40k less than contract price. The builder has pulled more comps that were never on the MLS, these homes were built "ground up" just like ours and support the price. Builder has sent a repeal request and appraiser accepted. We are waiting on the results. The other twist, being that it is a new community, not many homes have closed and the comps the builder pulled are their homes they sold but 8 miles away from similar communities.

Thanks for your input

Answer 1

A house listed on the MLS would not be used as a comp for an appraisal. The value of a house listed on the

MLS has not been established. Houses listed on the MLS are asking price of the house. The asking price might

never be achieved.



The only homes listed as comps for an appraisal would be houses that were sold. The price for this house has been established as it has been sold.



You appraiser would make every attempt to find comps of sold properties as close to the subject property as possible. They would also make every effort to find a house as close to the make up of the subject property, such as the number of bed and bathrooms, square footage.and other amenities of the subject property.



Normally your appraisal would have to be accepted by your mortgage underwriter. If your mortgage underwriter would not accept the appraisal for some reason, your mortgage loan would not close.



There has to be some method of proving the value of the property you are purchasing. The value might not be what you want. If this is the case, in order to close on the transaction the builder would be required to lower the price of the house to match the appraisal.



The other solution is you could pay the difference of the sales price and the appraised value. This would not make financial sense as you would be purchasing an over valued property. The property would be below the appraised value. You would have negative equity.



The onus is on the builder, this is not your problem. You should be willing to pay the appraised value of a

property not an inflated value of the builder.



Your loan amount would be based on the appraised value, not the over inflated value of the builder



I hope this has been of some benefit to you, good luck.



"FIGHT ON"

Answer 2

New build is usually a really poor investment. Not only does a newly built house sell at a premium price that vanishes as you close on it but there are all sorts of hidden costs that you do not have with an existing house. Have you factored in the cost of shelves, closet fittings, window treatments etc?



Bank knows that builders are notorious for price fixing meaning that the sale sticker price is not what they receive. So go back and see if you can get a discount based on the appraisal.

Answer 3

they are not required to use homes outside the MLS, but they could.



As a builder, we always put the sold homes in the MLS just for this reason.



There usually isn't any reason not to use the other community. This happens to us all the time.



Sounds like the builder and their sales agent was to lazy to put them in the MLS. The builder needs to make it "easy" for the appraiser to do their job. And putting the sold homes in the MLS is the easiest and best way to make sure problems like this don't happen.

Answer 4

the appraiser has a problem when part of their job is to find other houses that are similar that have sold in the area

since there are none with these being brand new in a new area

it might be a good idea to see what the county will appraise the property and see how that compares with the market price since comparison is nearly impossible

Answer 5

When a home is appraised, it does not mean that is the price you will need to pay

The price you must pay is whatever the builder will accept. An appraisal is only an

educated guess, not an accurate cost effective price.

Answer 6

Yes, he has a right to pull comps from any surrounding areas and homes not on the MLS.

Answer 7

The comps your builder is providing are useless, if they are eight miles distant from the property you are purchasing. You will need comps for a location much closer to your area.