Buying a House - Appraisal came in low
4bd, 2ba, 1900sqft, 9500sqft lot. Has a nice sized landscaped yard with mature fruit trees and a big pool + spa. The yard is really nice.
List price is $520k, we offered $521 "to get it"
We did the home inspection and the house needs new roof + electrical issues for an estimated total of $15k. Pool needs resurfacing: 4k.
And now the appraisal comes in at $485k. None of the comparably sized homes in the area have sold for more than $485k. One comp out there was for a larger property for 525k. We like this one because of the nice pool and yard with fruit trees. It is in a residential area, but next to a church parking lot.
At first I was mad about the appraisal, but as I look at the comps I can't justify how I offered 35k more than the largest comp sale.
So now I'm looking at a house appraised for 485k, that needs a new roof for 15k with an accepted sale price of $521k. Seller was going to credit me 15k for roof and electrical issue at $521k, but most likely would not do it for 485k
Inside the house is dated: blue carpet, wall paper. I would need to add laminate floor + paint in addition to the roof + electrical stuff.
Agent thinks the appraisal is very low. His complaint is that appraiser did not properly value the lot size. Lot is largest among comps, but sqft is on the low end. He says we should use it to try and get the seller to lower the price.
Appraiser had the contract price of 521k and still came in at 485k. Market is San Diego, low inventory so market is not going down. In this market appraiser could have fudged the numbers a bit, but didn't.
My concern is that the "value" isn't there. We like the house, it's close to schools, public transportation. I'm not thrilled about the church parking lot. Neighborhood is older 1965, no HOAs. Well taken care of.
any suggestions ?
Edit:
Agent's mentioned that if I hold off and pass on this property and wait longer the market might move and homes might be more expensive next year. I also own a condo we will sell once we buy the house. Agent didn't run comps on this house because he thought it would go fast and there would be no problem with appraisal. We do have an appraisal contingency.