unit appraisals for mortgage approval

it should appraise for what it is worth

It should never appraise for less if you want to be able to get a morgage

matsonjones: apt_boy said it. It should appraise for what it is worth. Many times if the value meets or exceeds the purchase price value, the appraiser may bring it in at the purchase price. The banks really just want to know whether the home is valued at what the purchaser is buying it for. There is no appropriate range. The closed comparables will have to support your purchase price. sunny.hong@bankofamerica.com

Thank you everyone - very appreciated.

I think it can depend on how much you're putting down. If 30% or more the bank will still give you the mortgage even if the place appraises a few % under purchase price. If 50%, there's a lot of leeway. (This is based on a couple examples I've seen; Sunny would know best how banks react in this situation.)

My appraisal came in at exactly the same as the selling price and my mortgage broker said that appraisals rarely come in higher than the selling price. Not sure what would happen if the appraisal came in less than the seller price.

I agree with downtown1234 mortgage broker, I haven't seen an appraisal come in higher. There is absolutely no advantage for the valuer to be sticking their neck out and as we all know a lot of banks telling them to pull it way in for there own safety.

I had an experience when I was at one of my properties when the valuer came and I was curious how much value my terrace added to the apartment, so I was like a "price is right hostess" doing a lovely arm wave to my 66ft terrace, he responded "you have a lovely amenity" I smiled and said "thank you, yes, how much would you say the terrace adds to the apt ?" He said "you have an added amenity, it doesn't add a dollar amount, however it will make it easier to sell." So apparently in NYC on the UWS a large, high floor, set back, primarily south and west facing terrace on a prime park block should help the apt sell as opposed to the same apt that didn't have one.

He was adamant and I didn't take it further as there was already 4 offers (2 being cash) within $50,000 of the asking, so I put it down to the market knows what it is worth to them, rather than the conflict of interest bank appointed valuer.

If the appraisal comes in lower than the purchase price, the buyer has to put more money down, for example if he goes to contract to buy an apartment for $500,000 and agrees to put down 20% which is $100K and then it appraises out to $475K, the bank will require another $20K down. However the contract should specify that the buyer is agreeing to put down 20% and no more. If the appraisal comes out for less than the purchase price and he has to put more money down, he should be able to get out of the contract and get his deposit back if he so desires or negotiate with the seller for a lower price, namely the price it appraised out to.