Appraisal question (banks, prices, construction, properties)

[sunnyinflorida]

A very large bank in South West Florida refinanced my home after we had paid down our loan, after selling our other home. Our home was appraised around $400,000. Months went by and the law firm who did the paperwork for the closing wrote and said they forgot to enclose the section A with the legal description of the property. They want to do a modification filed with the county, to include the legal description. Shortly after this we get a letter from the bank stating that our home equity loan was cancelled due to the decreased value of our home. I called and they said that my One year old, 4,000 sq ft home along with two acres with city water, with all the extras, was valued at $117,000. No person ever came to my home for an appraisal. They did it over the computer going to the property appraisers website that list only the value of the vacant land. Now the bank wants $240 to have someone come out and physically appraise the home and land. Is this all legal or is there somewhere I can go and report this?

[pianogal]

Well, normally when you refi you do have to pay for an appraisal. That's part of the process.

[sunnyinflorida]

We did at the refinance. It came back around 400,000.

[Goodpasture]

The bank can close a heloc anytime they want. It is their money, and if they don't feel collateral is sufficient due to the economic "times" there is little recourse for you.

The issue appears to revolve around the value of your home. They used an AVM (a computer program) to determine the properties current worth. These are notoriously inaccurate. Your prior appraisal (as are all appraisals) is for a specific point in time. If the market has changed subsequent to that appraisal, the appraisal is not applicable to the current situation.

As I read in the papers these days, the Florida market has experienced substantial declines in value over the past few months in many of the markets. To find a current value a new appraisal must be done. That they can get one done for $240 is suspicious. I doubt I would do a house, as you describe, in your market, for less than $500, probably closer to $700. If you are going to get the quality and professionalism you need to support your value estimate, don't pay Wal-mart prices. Not that your estimate of value is of any consideration in the appraisal process, but if you are going to want to be able to rely on the results, hire someone who doesn't do it for a bargain, but will take the time to do ALL the research it takes to provide a solid opinion of value.

I don't understand what the complaint is about the fee, anyway. You are talking a difference in value of nearly $300,000. $240 is a significant consideration? Frankly, to be honest, if it were me, I would not only have the bank do the appraisal, but I would hire my own appraiser to do one, and I would also hire my own appraiser to review the banks appraisal. I would REALLY want to know just how accurate the bank is and I would REALLY want to know how much my house is worth today.

[Annemieke Roell]

I can't add anything to Goodpasture's excellent advise, except to say that if you would like referrals to some highly professional and talented appraisers, please DM Goodpasture or myself with your contact information and where you are located and we'll send you some names.

[sunnyinflorida]

First the 2 acres was on county records for just value of $122,900. Second the prep just to put the house on the tract was another $19,000. They are saying house & land, granite counter tops thru out with upgraded por tile, surround system inside and out with wireless internet plus many more upgrades of a 4000 sq ft, one year old home is only worth less then the county appraisal of just the land. I am in constrruction and pre Hurricane Charley(2004) prices was $69 sq ft basic home no upgrades or land or prep. They are saying house land and all upgrades 29.50 sq ft. Whoever did it went on the appraisers web and took vacant land value. Even if home values have dropped in this area the past year by 26% total. The house was appraised by itself for around 400,000 (by same bank) in Sept minus 26% is $296,000 plus land. the going price right now is around 20,000 per lot times 8.8 lots is 176,000. I could of sold the tract in 2006 for $250,000 by itself, I passes up on the offer. Last year same lots were going for 35,000 per lot. I am waiting til the county mails out the taxes in August to show the just value of the home. I have been in construction for 28 years. My thing all along is, can they low ball an appraisal just to close a home equity line when we had paid down our original amount of construstion loan by 100,000 (same as equity line)before refinancing home in Sept? (Even my mortagage broker is upset at the fact.) I know $240 is not alot of money, its the principal that someone can sit in their office, do this and not be responsible for their actions.
BTW if you can find any other home that they are selling for $117,000 including all I have please get hold of me.

[Annemieke Roell]

Yeah, something is not quite right. Hire your own appraiser .... that ought to straighten it out.