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Old 03-29-2012, 07:32 AM
 
Location: IL
2,987 posts, read 5,238,226 times
Reputation: 3111

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My last few appraisal experiences have been pretty good, both my sale, purchase and the refi. All appraisers were very responsive and I thought did good work. I worked for a company that was a supplier of information/services to the appraisal industry for about 6 years, right during the bubble. Appraisers were really getting pushed around back then and I know how hard it was for them to survive in the sorrupted world that banks drove. But, I also understand how subjective the appraisal business can be, but it is better than not having an appraiser, I believe.
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Old 03-29-2012, 09:45 AM
 
Location: Magnolia, DE
91 posts, read 295,695 times
Reputation: 39
@RJRCM Thanks for your post! Very helpful! Very much appreciate it!!!
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Old 03-29-2012, 09:54 AM
 
3,020 posts, read 8,593,104 times
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Since you know the property value based upon your offer, just tell the lender that and argue that the loan should be based upon your opinion and not the appraiser's. You obviously don't need an appraisal. Hopefully, they will listen.
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Old 03-29-2012, 11:16 AM
 
17 posts, read 39,945 times
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Quote:
Originally Posted by Annemieke Roell View Post
I am not sure what you mean by the part I highlighted.

While, as it was pointed out elsewhere in the grid, appraising is not rocket science, it DOES take a lot of education and experience to analyse the Subject, Sales and market. For Comparables, we choose sales that are closest to the Subject in size, location, conditions, etc. If we can't find those, either in the Subject Subdivision/Neighborhood, we go to other, competing neighborhoods. And then we adjust for any differences based on what the market indicates certain items are worth.

The OP stated:


Quite frankly and bluntly, unless the seller is a fellow appraiser, I am not in the least interested in their opinion of what would be better "comps" and what adjustments should be used for a busy street adjustment.

These types of adjustments come from market analysis where we analyse many sales in different locations and see what, if any, impact a busy street has on the locational value.

What your appraiser did was not out of fear or laziness. We have worked very hard to obtain and maintain our appraisal licenses and would be crazy and stupid to have a nonchalant approach towards the properties we appraise. Nor was he/she "conservative". It is just as bad and illegal to undervalue properties as it is to overvalue properties.

It seems to me that your appraiser did his/her due dilligence.
I'm not sure if you read my entire post, but I was actually able to appeal his appraisal and the field review appraiser agreed with my comps (from a <<gasp>> non-appraiser). The thing about my comps was they were not a year old and were actually comparable. The fact that you would come to what seems to be a knee-jerk defense of the original appraiser where you haven't even seen the appraisal I think speaks volumes.

If a property has been exposed to the open market (i.e. listed in MLS) for a reasonable period of time, after which a buyer and seller agree to a sale price, an appraiser better have a compelling reason for concluding a Market Value that is NOT the same as the contract price! After "The Market" has spoken, appraisers have an obligation to provide documented support that explains the activity of The Market to the lender. It is ludicrous that an appraiser can kill a deal by concluding a value that is 5% below contract...NOBODY can be that accurate! Legitimate buyers that have searched the market are the best ones to determine what a certain property is worth, to them. Appraisals, by their very nature, are always a look in the rear view mirror.


If appraisers could give a range, that would seem to make more sense than relying on one person's opinion for such an important transaction. Instead, the big appraiser petition out there is about getting paid more.
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Old 03-29-2012, 11:22 AM
 
17 posts, read 39,945 times
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Quote:
Originally Posted by TracySam View Post
Maybe you'll feel better to know that I had the opposite problem.
No, it doesn't make me feel better--I wish it had worked out better for you... Every situation is different and my main point is that the system doesn't seem to be working quite right.
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Old 03-29-2012, 12:00 PM
 
683 posts, read 461,695 times
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So, here are some questions, because I'm afraid we might have trouble next year when we sell.

What recourse do we have if an appraiser comes in too low? That's what I am afraid of.

There are two separate styles of houses in my large development. Bi-Levels and Center Hall Colonials. The houses were all built around 1975.

Mine is a colonial and we have redone the entire inside (open concept) updated baths, kitchen, granite, finished basement, high and dry, private cul-de-sac, inground pool, new furnace & AC, new water heater, new windows, expensive fiberglass front door.

What happens if the appraiser deems it the same as another house in the neighborhood that sells that hasn't updated anything, nor is on the prime cul-de-sac, etc?

I'm starting to print out photos of the homes for sale in my neighborhood now, so that I may have some type of reference point later.

But back to my questions....how does one go about challenging an appraisal that is "unfair"????
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Old 03-29-2012, 12:39 PM
 
Location: East Tennessee
3,928 posts, read 11,577,338 times
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In terms of "fairness" I don't know any appraiser willing to risk losing their license over one transaction so I don't think this should be of any real concern.

Assuming you have not over improved for the neighborhood, there are some things you can do in the meantime to help support your position:

o If it's not too late, take before and after pictures and provide supporting detail about the improvements you made (including cost of materials and labor). Receipts are helpful, too.

o When it comes time to sell and you and the buyer are in negotiations, add a contingency to your contract that if the property does not appraise then another appraisal is to be ordered. If you make it to receipt of a 2nd appraisal, this is where you would re-negotiate.
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Old 03-29-2012, 12:57 PM
 
17 posts, read 39,945 times
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Quote:
Originally Posted by suzsaz View Post
What recourse do we have if an appraiser comes in too low? That's what I am afraid of.
Well, when it's time to sell, your realtor will do a comparative market analysis (which if done right should at least put you in the right ball park--a lot of people recommend getting 3 CMAs; don't just pick the highest one). Imho, the worst of both worlds would be if it took a really long time to sell because it was priced too high and then when you finally got a buyer it appraised low.

There are a lot of variables. If the market is declining when you sell, that will probably be counted against you if there are no recent comps. Hopefully for you, that won't be the case. What you mention regarding your updates is a risk from what I have seen. A lot of people complain that appraisers don't give much credit for quality or they might use foreclosures/short sales, especially if there aren't other comps.

So if it does appraise low, this is how our appeal process went. We talked to the lender who said to put together our concerns in a letter. We really did our homework and put together a number of points. If you have a realtor, he/she should help you with the process. We didn't use a listing realtor so we did it ourselves.

The lender will review it. Ours ordered a field review (which is rare, I guess). Be aware that the new appraisal could come back lower. And if it is an FHA, the appraisal stays with the house for something like 6 months. If the appeal is unsuccessful, your options are (1) reduce the price to the appraised value, (2) buyer comes up with the difference (or some part of it) in cash, or (3) walk away.

Try not to stress too much about it this early in the process. You will make yourself nuts.
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Old 03-29-2012, 01:36 PM
 
683 posts, read 461,695 times
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Thanks for your advice. Since Center Hall Colonials very infrequently come on the market in my development (I've been here over 20 years)....the two that just came on totally got my interest.

I have printed out the realtor pictures of each house (about 20 or so pix of the inside and outside), to use in my defense.

Did we overimprove our house? Some people might say we did, but all we did was update a house that was built in 1975. There are houses in our development just like ours that I've been in that have just repainted rooms over the years. Same old kitchens, same old bathrooms from the 1970s.

It just burns my butt to think that my house might be compared to those...hate to sound "stuck up" but my gosh, what's fair is far.
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Old 03-30-2012, 05:24 AM
 
Location: OK
2,825 posts, read 7,530,825 times
Reputation: 2056
Quote:
Originally Posted by TampaKaren View Post

I had one other incident that still irks me. After 4 days, I called an appraiser to ask when we could expect his report. His only comment to me was, "You can't talk to me; I'm an appraiser." I wanted to tell him to get over himself but I abstained. The appraiser had a copy of the contract so he knew the agreed upon terms and conditions between buyer and seller and my question was nothing that would have influenced his decision.

.
If that is what he said, you should have definitely told him to get over himself. However, are you sure he didn't say that he couldn't discuss it with you because you are not his client?

I never have a problem talking to realtors and others when I am working on a file, but technically the appraiser was correct when he said he couldn't discuss it with you. By law, the only people we can talk to about the file are our clients; i.e., the people who ordered the appraisal.

But there are ways of presenting that.
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