We applied for a loan on one of our properties at the beginning of February. As far as comps go, there was not much for our appraiser to go off of. The subject property was one of the biggest houses in the neighborhood and not much had sold in the last six months. The appraisal ended up coming in at $145K.
We finally closed the loan today…a month a half later. If it weren’t for an appraisal review, we would have closed it in half the time. It can be frustrating when you think a loan is going to close by a certain day, and it takes a few more weeks. A good question to ask anytime something like this happens is “What can we do so that this doesn’t happen again.”
After discussing this with our mortgage broker, we decided to try a couple different things on the next one. First, we made sure to tell our appraiser to be a little more conservative. An appraisal is just an opinion of value and would range depending on who does it. We just want to be on the lower end of that range now. We also asked the appraiser to include a detailed list of repairs that were done to the property. Lenders are leary when they see a property was bought for $97K and someone is applying for a loan on that property for $145K three months later. If a lender sees that the property needed a lot of work, there isn’t any reason for them to throw a red flag.