You can challenge the appraisal and provide alternate comps for the appraiser to consider. I wish someone had told me this years ago, as we've had two appraisals for refis where we've had to bring money to the table and the comps where way off...but with the last one (which, ironically, was high enough anyway!) the new loan guy said "you know you can always appeal it if it's low and you feel the comps they used were not appropriate, right?" Have your agent submit comps directly to the appraiser--not through the other agent. The buyers may need to be the ones to formally challenge it since presumably it's technically their appraisal. Work with them for this, and just make sure their agent understands that it's an issue of whether the deal goes through at all--not how great a deal her clients get. Good luck!

I was successful in challenging an appraisal. You have to find comps (I suggest more than the minimum), that are near you and sold recently. Submit with a letter with why you believe the appraisal to be in error.

Officially, the appraiser is hired by the buyers, so you may need them to submit the letter. But, obviously you both want this to work out, so you can help them find comps.

How "hot" is your market for your home type? If you think it reasonable you'll sell again soon, I'd say no. 45K is a HUGE hit for a less than 200k property/house.

Well nothing is selling in our area so I don't want to lose this buyer (they haven't sold their house yet so it seems we have some time at least). They also sent us a nice letter the other day saying how much they want the house still and are willing to wait.

Our agent did submit a letter and comps, but someone (I'm not sure whom) did not submit them and lied to her about doing so. I sent my agent a note this morning saying she should send her letter and comps to the buyers agent and have her submit it.

The buyers agent seems to be a total flake, and I don't know how hard she will fight to get us a new appraiser. Oh and the first appraiser is not from our county. He is from a city about a half hour away which is very urban. Our county is very rural, and this doesn't seem to bother the lender. Also the first report the appraiser sent was rejected by the underwriter but we don't know why.

DH and I are willing to fight but I don't know how the buyers will even though they really want the place.

Did they have an appraisal/financing contingency?
If not, they are likely out whatever earnest money they have in.
If you choose not to lower your price, and they can't meet their contract price (what they signed), then, they would be in breach of contract. So, they have reason to want to get that appraisal raised.

It is not likely you'll get a new appraiser, only a reconsideration of the appraisal. In our case, the same appraiser agreed that 2 of the 5 additional comps I sent him were reasonable for our house, he used those, and the result was our appraisal was increased.

This all takes time, too.

One thing that struck me in your post is that this is a manufactured home. Manufactured homes don't typically appreciate in the same way a stick-built home does. The land upon which it sits may appreciate. Have land costs increase by 10% (which is about what it would take to get to $190,000 based upon your original sales price) in the years since you purchased the place?

The land has increased for the other comps used but ours was actually devalued. We made a walking and ATV trail with an 8 foot tall bridge that is about 12 feet long to go across the creek on our property. We also made two large fire rings and the property is mostly treed.

I understand manufactured homes do not appreciate but others in the area (which there are many) have either kept their original value or stayed within about five thousand. I'm thinking I need to check out the appraiser to see if I know him.

Our agents are trying to set up a meeting with the lenders manager to show them the letter and new comps. So hopefully something good will come of this.

Also manufactured homes in our area which sell for what ours is appraised for is either a 1970s trailer on 10 acres or a manufactured home like ours on no land. We have a ten year manufactured home with walk out basement and lots of updates like hardwood floors. We also ha e ten acres right off of pavement. I just couldn't figure out how the appraiser for the numbers to add up. I seriously thought he had just made a typo.

Are the comps all manufactured homes?

Could be a similar issue we ran into. The appraiser were from a different area and didn't have access to the local mls. He used what he could find from properties advertised in one of the large city mls instead. Which had very few true comps and some were vacation only properties. One even was a bunkhouse with no indoor toilet.

Not sure how you could even compare that to a stick built custom home. We ended up sending other comps to the lender and he amended his appraisal, but still kept the bunkhouse one on there, which really pulled down the appraisal. He even put it had a full bathroom, which all around here knows it didn't.

He also had issues with adjusting for the land value as he used city adjustments where there really isn't much difference between values in the land as the lot sizes are very similar. It is possible that you had the same issue as well. Didn't seem what to do when there is a lot of value in the land.

This post was edited by lyfia on Sat, Aug 24, 13 at 16:21

we resolved a similar problem years ago by finding a local appraiser familiar with properties such as ours ( ours was a rural home and he specialized in rural properties). We paid him to do an appraisal and the buyer agreed to do a compromise between our appraisal and his, we simply averaged the difference (which in the end came out only $5000 different). Best wishes.

I'm okay with this taking time because I would rather deal with that than losing so much money.

All of the comps the appraiser used were manufactured homes. My agent talkies to an appraiser friend of hers and he said only three needed to be used and the rest could be stick built.

I know this may seem weird because I grew up in the city so I understand. The problem is it seems like we have an appraiser like that too. Our area has tons of manufactured homes.
I'm going to be out of town for a couple of days, but I wanted to let everyone know how grateful I am for the help. My agent is trying to figure this out too, and believed me I'm passing this along.

Typically during the good economic times, the depreciation on the manufactured home just about matches the increase in the value of the property. Meaning that if you bought it for 176, that's about what it would be worth 10 years from then as well. Lots of areas of the country are still in a flat or depreciated market though, where the depreciation of the home and the lowered value of the property would leave you underwater. Home improvements in a manufactured home don't add value, just selling appeal, so you can't count on those to make the home worth more.

But with your "buyer" also having a selling contingency, I don't think this is a salvageable sale at all at this time. I'd focus the comps that the real estate agent used to establish the asking price, and why he felt that those were appropriate choices to compare with your home and property. Then, have your own appraisal done to verify the number. Then put it back on the market under the appraisal number. Or become a landlord and rent it out if that number isn't high enough for you.

OP,

I'm not sure that I understand part of your original post -- Wells is currently your lender and is likely to be the buyer's lender because they "[are] the only lender for this [manufactured homes?] anymore"? I know it's a huge company, but do you happen to have any contacts from your purchase or refi who you could reach out to?

I'm sorry I don't know the details of how this transpired, because it was more the sellers' issue, but I purchased a home which appraised for less than the agreed purchase price (and I had a contingency). The sellers' agent provided the additional comps to the appraiser (my agent and I didn't, as I had nothing to gain!). The appraiser amended his report -- in my case, it was still (IMO) under-appraised (this wasn't unusual in my area, as an overreaction (again IMO) to the inflated appraisals of the bubble; we also had to deal with a depressed market, so there weren't as many comps as would be ideal), so I had to come up with some of the difference and the sellers agreed to a lower price. We were fairly informal so I believe that the agent sent the comps directly to the appraiser. Especially since the buyer's agent may be unreliable, I'd ask your agent to ask if s/he can send the proposed comps directly to the appraiser (copying you). I would send comps for the $190k price -- i.e., what you think the comparables for your home actually are -- not for the $135k appraisal. Also, if there are any deficiencies or amenities that were missed, I would be sure to point that out so the numbers are adjusted accordingly (# of baths, condition, etc.).

As you know, the appraiser works for the lender, so I'm not sure how much more you can do. I personally wouldn't pay for an "independent" appraisal because, frankly, it doesn't matter what you or your buyers think the property is worth if they cannot buy your place unless it appraises out.

Giving both your agent and the appraiser the benefit of the doubt (I assume everyone thinks they know the appropriate market price), obviously they are incentivized differently -- the agent to make a profit and the appraiser to minimize his client's (the lender's) risk. Maybe the right number is somewhere in between. I would take another look at comparable properties which have sold in the past 6 months or so, just to make sure you're as educated in this process as possible.

Good luck!!