Huge gap after appraisal
We are in contract to buy a penthouse condo in our dream neighborhood. I know all the reasons not to buy a condo but we couldn’t afford SFH without compromising on location and we by a unique set of circumstances found a unit that we loved that is off market, placed an offer, and were super excited. It has great views of the Bay, a massive wrap around deck, and at 1500 sq ft was as big as a lot of the SFH we were looking at.
We got our appraisal and it’s $125,000 less than our contract price. We were absolutely stunned as we thought we were getting a great deal. The comps in the area put the sq ft at slightly above the rate we are paying. I’m a little shocked that our per square foot price would be lower.
Part of the issue is that there is nothing directly comparable in the unit or neighborhood in terms of size or its features. I’m a little worried now as I can’t imagine sellers will come this low. They will probably want to test the market and see what they can get. But we don’t have the means to front this big of a gap without our lender. I’m very worried about losing the home now. And also simultaneously worried that maybe we were completely overestimating its worth and overpaying? Although even looking at the comps the appraiser used I still feel its value is much higher than what he is estimating.
Has anyone seen a gap this big? We are first time homebuyers and our real estate agent has made a few mistakes so any guidance would be appreciated.
Thank you!
Edit: our appraisal contingency was set to expire today but our under our realtor’s advice we are asking for an extension.
Edit: the unique features were not all part of the appraisal as the deck is owned and maintained by the HOA but this unit has a private easement giving exclusive rights. So essentially we wouldn’t own our deck but it would be “ours” in that it’s the deck on our unit and our furniture would be on it. For this reason the appraiser doesn’t consider it.
Edit: learning how to read an appraisal report for the first time and understanding how he got to his number now. He seems to have counted our deck but valued it as a typical apartment balcony (not a huge wrap around deck), he doesn’t count the den as a third bedroom/office but it has a French door and functions as a third room so he comps to two bedrooms but we have been so excited about having three rooms, he couldn’t find a comp in our exact neighborhood so he went one neighborhood over which is not a bad area per se but it’s an area that’s a little more sketchy (there was a drive by shooting not too far from there last week) whereas our unit is surrounded by a golf course. It’s apples and oranges in my book. But that “comp” is a three bedroom townhome that is modern and turn key so he’s valuing as way above ours. It’s a perfectly nice and well priced place but tbh I avoid that area when I look at Zillow in map mode!