Hoboken Condo Appraised for Less Than You Thought?

When counseling buyers and sellers on their Hoboken metro area real estate, I prepare them for what is becoming a somewhat common occurrence…..the low appraisal. That’s a situation where an appraisers estimation of value for a particular property is lower than the accepted offering price. For instance an offer is accepted for $550,000 but the appraisal estimation of value is only $515,000. If the appraisal is too low, buyers may not be able to borrow enough to purchase the property.

First of all, I’m a real estate agent, not an appraiser however we deal with appraisals as part of the normal course of our business. Some points to consider that I’ve encountered from over 10 years of buying and selling real estate personally, and professionally:

The appraisal is an opinion of value. In general, the appraiser compares the features, location and condition of a home to similar properties to arrive at a dollar figure.

Real estate markets are hyper-local, meaning that small nuances of a market can affect value. Appraisers that are not intimately familiar with the local market may not be aware of these.

Check the appraisal for mistakes. Some mistakes I’ve found in dealing with low appraisals included:

1. Appraiser failed to look at other comparable properties that sold higher. I typically bring comparable property listings to the appraisals that I attend for my clients. The appraiser may or may not use these
2. Incorrect addresses (big mistake!)
3. Features added to comparable properties that did not exist such as properties having a balcony when in fact they did not.
4. Subject property having features omitted. I was selling a condo that had two parking spaces but the appraisal gave value for only one
5. Inaccurate gross living space
6. Incorrect age of the buildings

Talk to your lender if you feel that you may have a legitimate case. They may consider having another appraisal preformed or may take into account mistakes that may have been made.