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NewBuyerInBay
Posts: 7
Registered: ‎09-20-2012
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Appraisal values differ by 120K. Is it because of Towhouse vs. PUD

Hello -

My first appraisal reported a property as a townhouse and came out at 635K. I ran a second appraisal and it came to 120K over the above price and exactly matched the offer price. The second appraisal reported the house as an attached PUD and somehow has a different sq ft area than the original one.

I want to ask how its possible for the area to be different and the prices to be so way apart. Is this a common thing around here ?

 

Also wanted to add, in the county records, the house is listed as a single family attached but other 'IDENTICAL' houses in the same community were listed and sold as townhouses.

Is it legit to accept the second appraisal which calls this property a PUD ?

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mediaguru
Posts: 1,896
Registered: ‎03-03-2011
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Re: Appraisal values differ by 120K. Is it because of Towhouse vs. PUD

What do you mean "accept" the 2nd appraisal? Accept for what purpose?  (a) If it is being done to get a mortgage, the lender is the one calling the shots on what to accept.

 

(b) If you're a seller, it would be moot to go for a drastically higher one because of (a) above -- the bank won't accept it, so it does no good if you're selling to a buyer who needs a mortgage.

 

I don't see why a PUD would really differ from a townhouse... doesn't a PUD refer to the overall property (like a mixed-use condo complex) rather than one individual unit? 

 

The biggest concern to me would be the drastically different square footage. What are they basing it on? They should be specifying those sorts of things in the appraisal report.  What does the public record say?  I would go by that... unless there have been additions/remodeling (in which I would still be concerned if they are not reflected in the public record because that means probably unpermitted)

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Curmudgeon
Posts: 265
Registered: ‎06-14-2012
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Re: Appraisal values differ by 120K. Is it because of Towhouse vs. PUD

I have a very low opinion of the quality of appraisals these days.  Variations like these don't surprise me.  The real points are what do you see the comps as selling for, and what will a bank accept as the basis for a loan.  It's not unusual for a bank to do a second appraisal (or "review appraisal") and only want to lend on the basis of the lower of the appraisals.

 

If there are odd factors in the floor layout, it's not unusual to have appraisers come up with erroneous SQFT measurements.  I've seen them be off by 20%, twice, on a property I own.

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norcalnative
Posts: 3,277
Registered: ‎05-04-2009
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Re: Appraisal values differ by 120K. Is it because of Towhouse vs. PUD

Your question makes no sense. As a buyer you don't want your appraisal to come in below the sale price especially if your offer is short on cash. An appraisal that comes in above or at the sale price is good. An Appraisal that comes in way above the sale price should not impact your purchase price given the agreed on sale price is already set. If your a seller and the appraisal comes in way above the agreed on contracted sale price with the buyer you cannot renig on the contract based on the appraisal the buyer must be out of contract ie violate the contract in some manner for you to legaly find a way to back out of the sale with the intention of relisting at a higher price.

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sheriff
Posts: 2,346
Registered: ‎06-01-2012
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Re: Appraisal values differ by 120K. Is it because of Towhouse vs. PUD

[ Edited ]

mediaguru wrote:

What do you mean "accept" the 2nd appraisal? Accept for what purpose?  (a) If it is being done to get a mortgage, the lender is the one calling the shots on what to accept.

 

(b) If you're a seller, it would be moot to go for a drastically higher one because of (a) above -- the bank won't accept it, so it does no good if you're selling to a buyer who needs a mortgage.

 

I don't see why a PUD would really differ from a townhouse... doesn't a PUD refer to the overall property (like a mixed-use condo complex) rather than one individual unit? 

 

The biggest concern to me would be the drastically different square footage. What are they basing it on? They should be specifying those sorts of things in the appraisal report.  What does the public record say?  I would go by that... unless there have been additions/remodeling (in which I would still be concerned if they are not reflected in the public record because that means probably unpermitted)


The OP never said the square footage was drastically different, only different.  A different sq.ft. number can come from things like not including stairways or laundry rooms, things like that.  I would go with wharever the county records say.

My unit is in a PUD, and I know that is supposed to be mixed use, but it isn't.  it is just 39 units with nothing else.  I don't know if there was an advantage to calling it a PUD, maybe for tax or zoning purposes.  As for calling it single family attached instead of townhome, a single family attached home is a townhome.