Recent Home Appraisal (Plano, Mansfield, Keller: mortgage, lenders, buying a home)

[Texascrude]

Just wanted to comment on how silly the home appraisal process is for getting a mortgage. You have to spend $400 on a mostly completely subjective appraisal that anyone with access to MLS could perform in about 20 minutes. What a joke.

We're buying a home in Keller for $325k. Appraiser went out, wrote up a big report, and told the bank it was worth $319k. They were going to make us come up with a larger down payment if we still wanted to avoid PPI (the seller was being stubborn and wouldn't budge on the price... that was our first plan). Luckily I've got a great agent, and she looked at the appraisal and found better comps than the 'professional' used. Submitted a contest form, they accepted it and came back with a $352k value -- over a 10% swing in value. If the process is so subjective that you could have a 10% swing in value, should I really be required to pay $400 to get this done?!?

I CAN'T WAIT until I save up enough money to start buying my homes with cash. The whole process is such a scam. Done venting.

[hal2814]

You're not required to pay for an appraisal. Don't like it? Pay cash for the home. If you don't have the cash or would rather put your cash elsewhere, then you'll need to borrow money to but the home. When you borrow money from somebody, you have to do it on their terms. And right now the appraisal process is very tight, but that's mainly because a decade ago it was way too loose. I imagine at some point it will even out. Unfortunately, you got caught in a really bad spot in the process. At least they upped your appraisal. From what I'm hearing they're not doing that very often and a lot of deals are falling through over it.

[Rakin]

The Govt is mostly responsible for some of the stupid new rules on appraisals.

The lenders can be held responsible and they want the appraisal to be ultra conservative. They can no long go direct to the Appraiser to discuss either.

[loves2read]

Now appraisers come from list or pool of agents and are sent in next-on-list-order I believe to houses they are assigned to check--
Unlike the past system when mortgage companies had some choice in agents they sent to do appraisals, this is supposed to stop any prejudicial coloring of valuations since the appraisals before the bust could have (fraudulently) raised the value of home going for inflated mortgage amount that the buyer/seller/mortgage co/appraiser would benefit from

Now while the appraiser might not have any attachment to the mortgage co, s/he also is not guaranteed to have any local knowledge/background of what houses in particular neighborhood are selling for...an appraiser for a Keller house can actually be in some Plano office or Mansfield so they would have very little personal exposure to Keller RE--
and believe me that can made a BIG difference in selecting comps...

Just because a house has similar sq ft and room #'s--like 4/2.5/2 in close area does not necessarily make it a good match for a comp...
some appraisers are just not that good at pulling comps and in area where there can be several neighborhoods close together where building values and land values have subtle differences, they may not pay attention to what comps they pull...

When we moved from Shreveport many years ago we had company buy our house since the market there was stagnant...
the first appraisal came in really low even for bad RE market, we had second appraisal done and it came in over 5% more I think which triggered a 3rd appraisal...
I was home when that guy came and we knew him--his son played soccer with ours--
he gave us an even higher appraisal--but he said that he took note of items like better grades of wallpaper and trim levels in home--which technically isn't supposed to make a big difference in an appraisal...
But we definitely got better price from company because of how his appraisal threw the price even higher...

I am surprised they didn't make you get third appraisal because of the big diff between 1 and 2...
And as someone said--sometimes the rise in home prices isn't reflected soon enough in the MLS completed sales--appraisers can't use negotiated prices that have not actually closed as part of their database...