According to the comps, the apartment I’m buying should appraise for $50K more than it has. Is there some reason that the bank has only appraised it to my cost?
This is a question I picked up from Trulia voices (the Q&A site on www.trulia.com) and I think it’s fascinating. Basically, I think the buyer wants a higher appraisal for his ego, and I told him to leave well enough alone.
Even in this day and age where we like other people to think we’re rich, you don’t want the appraised value of your property to go up too fast because there’s a chance that the tax man might notice. (Yes, even though you’re paying “maintenance” in a co-op, part of that payment is the building’s underlying property taxes.)
Secondly, and more importantly, you run the risk that the seller might decide that they’re leaving too much money on the table. Even in the case of a fully executed contract, the seller could pull the deal, re-sell the apartment to someone else at the higher appraised value, and let you chase them around the courthouse for years trying to collect your damages.
The moral of this story is, if you have an appraisal that’s good enough for you to buy the property off of, leave well enough alone.
As I put it to the questioner: “What park are you going to live in while you sue the seller for specific performance?”