Re: Appraisal Came Back Low for refi - Posted by Karl (Oh)
Posted by Karl (Oh) on July 19, 2002 at 10:04:53:
We just had the exact same thing happen to us. Three months ago we went to our credit union to refinance our home. The appraisal came back about $30k lower than we expected. Two of the three comps in the appraisal were homes half the size of ours. The appraiser added a measly $5k to each to make them comparable. There were many other homes more similar to ours that had recently sold for considerably more, but they were ignored. We think this appraiser decided beforehand what our home was worth, and then targeted comps to support his opinion.
I called my loan officer to explain the problem. She backed the appraiser right down the line and in so many words told me I was all wet. She took our original purchase price from six years ago, added 3% a year for appreciation, and decided the appraisal was right on. I told her that we had completely rehabbed the home. She explained to me that rehabs only add personal benefit, they don?t necessarily add any value to the home! I went to her boss, who basically shrugged her shoulders about the whole situation. We didn?t want to go to another bank because our credit union had a terrific mortgage product, and we decided we were going to make them get this right. I wrote a three-page letter to them, with a package of supporting documentation, which included comps off the MLS, and one neighbor?s recent appraisal. They sent the package to the appraiser for his review. The only point he addressed was my neighbor?s appraisal. He thought it was an old appraisal on our house, and ripped it apart for being so off on the physical description of our house! This guy was from Mars. Then he restated that his appraisal was still good. What else could he say? He wasn?t going to admit that he made a $30k mistake. At least you were able to discuss your appraisal with your appraiser, I couldn?t get my guy to return any of my calls.
We finally got the credit union to agree to order a second appraisal. It came in $34k higher than the first guy. We closed the loan this past Wednesday, three months after the process started. They tried to charge us for two appraisals at the closing, we made them take the first one off.
Now that the loan is done, I?m penning out a scathing letter to the president of the credit union. The first appraiser was incompetent, and the loan officer was adamant that it wasn?t a problem. They?re both dog meat.