Is there anywhere to report an appraiser who didn't do there job correctly? (appraisal, 5%)

[bls5555]

This is the situation we now find ourselves in:

We bought a house in Oct 2005 for $87,000 and it appraised at $88,900

Our mortgage is now at 100,000 and we have probably put something like 25,000 into the house.

We have redone EVERYTHING. The house was a definite fixer upper when we moved in. We have redone wiring, roof, pipes, added a bathroom, added another bedroom, added another living area, redone the kitchen, resurfaced hardwood floors, put in new carpet, etc. etc. You name it we probably did it.

When we bought it it was a 3 bed 1 bath 1190 sq. ft house

Now we are done with it it is a 4 bed 1.75 bath 2300 sq. ft house

Well going in to refinance into a new mortgage, they send out an appraiser and she appraises it at $90,000!!!!

$1,000 more than what we bought it for in fixer upper condition.

I almost blew my stack because it was clear from the beginning this lady wasn't giving us a fair shake. I had actually emailed the mortgage people after she left saying it didn't seem like she was going to do things correctly.

We live in a small town and it is tough to appraise houses here but that's no excuse for what happened. She isn't from here, she was from a suburb of St. Louis.

So my question is, have any of you realtors or appraisers had a situation like this before? Does it seem odd to you that with all the improvements it would only appraise for $1000 more?

Opinions? I am going to get another appraisal from an appraiser here in town as I know them being from here will be able to appraise the value better.

This appraiser didn't even take into account that we have about $20,000 more land than comparisons (I have a whole list of examples that was sent to the appeals department). Is there anywhere to report this kind of stuff?

I can't do anything about it now, but if it saves someone else from getting this appraiser I feel it would be worth it.

Thanks for the help.

Edit: Let me add here that at the beginning of July a house that was about 1400 sq. ft. 2 beds 1.5 bath sold for $110,000. It is only about 5 blocks away.
Once again, I have numerous examples and reasons of how badly this appraiser did there job.

[Tish Thompson]

I'm a Real Estate Consultant in VA. I'm not sure what state you're from, but you may want to check with the state board that oversees licensing. From what you've said, I'm not really sure that there is really anything they could do to help. The appraiser is looking at the actual value of your house in comparison with similar homes that have recently sold. Updates/renovations should be taken into account...but it usually doesn't add the kind of value homeowners think it does.

Out of curiousity...I've never seen .75 bath. What makes it a .75 as opposed to a half?? The size?

[southernlady5464]

I'm not sure what state you're from, but you may want to check with the state board that oversees licensing.

She isn't from here, she was from a suburb of St. Louis.

I suspect Missouri. Liz

[Gretchen B]

Originally Posted by Tish Thompson

I'm a Real Estate Consultant in VA. I'm not sure what state you're from, but you may want to check with the state board that oversees licensing. From what you've said, I'm not really sure that there is really anything they could do to help. The appraiser is looking at the actual value of your house in comparison with similar homes that have recently sold. Updates/renovations should be taken into account...but it usually doesn't add the kind of value homeowners think it does.

Out of curiousity...I've never seen .75 bath. What makes it a .75 as opposed to a half?? The size?

1/2 bath = sink + toilet. 3/4 bath = sink + toilet + shower. Don't know if that's std across the country, but that's how they differentiate around here.

First of all, bls5555 - yes, you can file a formal complaint. Check with your local board of realtors - they should be able to direct you to the proper oversight entity. And yes, from what you've mentioned in your post, the appraisal does indeed sound low.

Here's a couple of things that may help. Do you have a copy of the appraisal? How many homes did the appraiser use for comps? Should have been at least 3 other homes that are comparable to yours in sq ftg, age, condition, amenities within about 1 mile from your home (or 5 miles in a rural area). Keep in mind that sq ftg on a secondary floor (either a 2-story or ranch with finished basement) will not be appraised as high as main floor sq ftg. (usually about 1/2 - 3/4 as much - ex. $150/sf for main floor; $100 for 2nd floor sf, and $75/sf for finished basement). Don't know if that applies to your increased sf or not. Also, I hate to bring this up, but have you had a huge market decline in your area? It didn't sound that way if the other small house sold for $110k fairly recently.

Are you using a local lender or one of the national banks/lenders? If it's one of the big conglomerates, they just pretty much use an appraiser off their "approved" list for your area. A lot of times these are appraisers from the nearest metro area instead of a local appraiser. If you use a local lender, they're much more in tune with the local market and are familiar with the local appraisers. You'll usually get a much more accurate appraisal by going through a local lender who uses a local appraiser.

At this point, I would definitely complain to your lender you're using for your re-fi and insist that your home be re-appraised by a local appraiser. In fact, it's pretty common to have a couple appraisals done on a re-fi. The downside, unless you're really stinky about it, they'll probably charge you for the 2nd appraisal. Especially if you're dealing with one of the "big boys" and you're just another number.

Anyway, hope you get an appraisal that's satisfactory!

[yellowsnow]

It may be different in your area of the country but the value of my home has gone down 35K since May of 06. It doesn't matter how much you improve the home, if the value drops, it drops!

[bls5555]

No, I am in the midwest so we didn't have the huge increase or have the huge drop off that some areas are having.

The problem is we went with one of the "huge" guys and like Gretchen said, they just used someone off their "approved" list, and yes they did come out from the Suburbs of St. Louis.

We are about 45 to 50 miles out of St. Louis on the Illinois side. about 35 miles from the suburb where this appraiser came from.

My problem with the appraisal is that (plus other stuff)

1. she didn't take into account lot size. The guy who was working on the mortgage for us filed an appeal and in it he pointed out that our lot was 5x bigger than one of the comparables, yet she added 0 value for that. We have 3 city lots valued at around 30,000 in 2005. Even if this area had a drop off of 5%(which it didn't), we still would have gotten the shaft on $19,000 worth of land she didn't even add in. (5% of 20,000 is $1000, so subtract that loss from the 2 city lots worth $20,000 in 2005 she didn't add in) That alone brings it up to $109,000 - $110,000

2. one of the other reasons you can't really just go by comparables being sold is that a lot of houses here are owned by older folks, hence they have no updates at all, where ours is completely updated and modern. As I was saying, she comes from a suburb which is experiencing tremendous growth, hence a lot of new houses where all you need to do is look at Sq. ft and such to compare, since most new houses will have comparable stuff in them. That is not the case here and she didn't account for that.

The market is definitely slow here, which is part of the problem as their aren't a lot of comparables, but to get the sort of appraisal she gave us, there would have had to of been a 30-35% market drop off and that just isn't the case.

And yes a .75 bath is toilet, sink, and shower but no bathtub.

We are paying property taxes on $15,000 more than she appraised it for, and the bank we have our home equity line of credit through, 1 yr ago. based on tax records appraised it at $115,000 (and this is before most of the stuff was done) .

We are going to be putting it up FSBO, in about 2 weeks, so we will be getting an appraiser from here in town. I will post that appraisal when we get it. The difference I assure you will be staggering.