Friends and Colleagues:
We are having a problem with a low appraisal which at its roots is probably an industry-wide issue that you are certain to bump into. Without immediately going into a bunch of detail, a customer that we are hoping to build for has received a low appraisal on their proposed project, which prevents them from meeting loan-to-value ratios that their lender demands.
I’ll go into more detail but if anyone else has experienced this problem, would you please share your thoughts and experiences.
Our customer has a contract on a 50 year-old home in a good location here in Winter Park. The home has been updated with new windows, cabinets, appliances, roof and fresh paint. It really is in excellent condition. We want to add 1400 square feet with a Master suite, billiards room and home theater.
I’m sure the appraiser feels like he’s doing his job correctly, but he’ll be paid whether the deal consummates or not. With only distressed sales to use as comps, the square foot value used to assess the value is quite low. The additional space supposedly has a value of $64 per square foot – ridiculous, huh?
What do we do now?
