I recommend a second opinion be given, if the seller does not agree with the initial appraised value. I am a Certified Appraiser and I am very familiar with the Centennial area; I grew up there and conduct most of my business there. I could do an abbreviated appraisal, as a cost benefit. Send me a quick e-mail if you think this would be helpful.

Regards,
Stefan Geyer
coreappraisals@comcast.net
CORE Appraisal Group

There is a chance your appraisal could come in low, but there's also a good chance it will come in at the contract price. I don't know the property or what the comparables are, however most of Centennial has been a pretty steady market. There's a chance the sellers could sell their home for money money in 2 or three years rather than less. Again, this all deplends on how it compares to other homes in the area at the present time. Many people that tract housing have come to the conclusion that the Denver metro area has seen bottom and is poised for pricing gains. There are some neighborhoods that still have some depreciation ahead of them, but Centennial isn't one of them. This recovery won't happen with a boomerag but will be slow and gradual, mainly because the pool of buyers has shrunk from what it was in years past, but remember, the Denver area is growing as it attracts new residents. Also, historically Colorado's economy has run counter to the rest of the nation. This was most recently evident when we started our foreclosure slide in 2003, while most of the rest of the country was booming. That's why, after five plus years, we're seeing improving conditions in desireable neigborhoods.

Sometimes, when a market is improving, you may not get appraisals to keep up with the market demand. This may be your situation. This was evident in August when I listed a extremely up-dated and well decorated home that was heads and shoulders above anything in the neighborhood. We priced it at $209K and had three offers after the first weekend. We accepted the best one at $206K, however, the apprasal came in at $190K. We felt the apparaiser could have done a better jog as he didn't go out of the small neighborhood of 50 homes, but used the limited amount of available solds, one of which was a foreclosure over 9 months old. We offered for the buyers to get another lender and appraiser at our expenses but the declined. We put the home back on the market at $203K and sold it the next day for full price. The new appraiser came out and some of the first words out of his mouth were, "I won't have any trouble getting this home to appraise", and he didn't.

Too weird... so in onw transaction, you are the seller that doesn't beleive the market conditions and won't accept the prices that appraisers are giving you... and NOW you are also the buyer who doesn't understand why the seller won't accept the appraiser price.

Perhaps this is a posed question to try to get the answers you desire in another way. Good thinking... but the answers are the appraiser is probably right about the value - or at least close to it.

If you want to overpay for the property you are buying, you can. It just can't mess up your ratios and your reserves. You really do need a buyers agent. However, many of the relo companies are only providing transactional agents because the fees are less. You should think about paying the difference there and hiring your own buyers agent.

I wanted to clarify a couple of things that may be helpful 1) We don't have a buyers agent that can help us... we have a transaction agent (Colorado), which is why I am doing so much homework on my own. 2) The appraisals have truly not come back yet. When we put an offer on this house, it wasn't on the market. It was a friend of the realtor. I think at the time their opinion was meet our price or don't bother offering. To be totally honest, our realtor wasn't very clear with us that he would be a transaction agent until the offer was done. So, of course, we thought that the whole time he was protecting our interests and would have told us if the offer was not justifiable considering market conditions. I will say that in his defense, he was clear that if the appraisals didn't work, and the sellers wouldn't come down, we have the ability to walk away. 3) Even though it may not seem like it, I think the sellers are a little more motivated to sell now than when we started, which is why I am trying to craft some arguments for them to meet the appraisal. They have found a house to move into that they really like (apparently), and I would assume they might lose it if we don't buy their current house. Also, we are in great financial shape, and I think they are realizing that someone to buy a million dollar plus house with no contingency and great credit might not come around again for a very long time.

True statement regarding banks not loaning money if the appraisal does not met the sales offered price. Your buyers agent should have compd the property prior to all your money invested to purchase the home, homes overvalued are extremely difficult to convince the seller drop their price. If seller listing agent is a seasoned veteran should be explaining these issues and concerns with the seller the home is over valued. HOWEVER IF THE SELLER owes more than home is valued in many instances that is true statement they would not be able to sale the home for a lose, seller needs to pay for listing/buyers agents fees, closing costs, moving expenses.

Realtors can't forecast the future regarding market trends best read study markets based on media publications, we have professional code of ethics of what we can or can't state in media or to our clients. Real Estate is like the stock markets with ups and downs .

Good luck sorry to hear all that has taken place.

Dlb,
You have a lot to work with here. Im going to work backwards:
yes the lender can refuse to fund you if the appraisal is below what you offered and was accepted.
I suspect that an appraisal has already been done?
If so and the appraisal came in lower than the agreed amount then you have all the strength you need to convince the seller to agree to the appraised price. An appraisal at a lower price than listed isn't going to fetch any better of a price inless they can find the magical cash offer.
No lender will support funding a loan at the amount more than what the home is worth and the appraisal is what the home is worth.
Now let me tell you if we are talking a couple of thousand dollars here than the appraisal may be challenged. I firmly believe if you send out ten appraisers you will get ten different values, so if we are talking about a small amount say under 15,000 then things can be done.
I, as all of the agents out there know, don't have a crystal ball about the market. If you find someone who does let me know.
I believe, and this is an opinion, that the market is going to turn around in 2010. We have a great deal of inventory to sell before there will be any kind of demand for housing. I feel this way because of the inventory levels and because when inventory is gone builders will be scrambling for permits which will take at least a year then you may see a slight rise in home values.
Again this is only my opinion and everyone has one.
Best of luck and happy holidays.
Please feel free to expand upon your question and I and everyone on here will do there best to answer.
Tyler