Thanks for the interesting story, Karl. I just showed the lender three other comps and he immediately ordered a second appraisal.The lender complained about this appraiser and stated they had trouble with him before, so I asked why do they continue to use him. They stated that he works for a good company and it is just this one appraiser that incompident.So the new appraisal is ordered and will take it from here, thanks for the info,its nice to know I’m not alone.I wonder where some of these guys get thier license.
I recently had my personal residence appraised for a refi.It came back 30k low.Can a appraiser be that far off? There have been homes in my area that have sold in the past and recently for much more than the appraisal came back at, and these houses are smaller than mine.Condition of my house is “move in”.I dont understand how these numbers are so far off.
What can one do, besides getting another appraiser to do it over again, to get these numbers higher.This is the first time using this appraiser and I already argued with him about his figures.I showed him comps that have sold with higher prices but he says that he cant see the value of my house.Whats one to do?
I’d appreciate any comments, Thanks
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.
Talk to your lender about the problem. Show the lender your ‘proof/comps’. Let the lender know that you are not happy with the appraisal that far off when you have comps showing your property is superior to those that have sold for more. Ask the lender if they can assign another appraiser to do it again. If you have to, tell the lender that if the numbers come back the same, you will pay the 2nd appraisal; and then realize your property is not worth as much as you thought.
But if the numbers come back over $30k above the last appraiser, ask the lender if they would pay for the second appraisal since the first one was not performed correctly.
I know you asked what else you can do, but there really isn’t anything that I can think of. You might get lucky with your lender that they will accept your comps instead of the appraisal that their appraiser came up with, but I doubt it.
That you never mess with Karl on Friday… or any other day, for that matter.
Good going Karl, on being persistent and taking those (all too often) lazy and incompetent apparaisers to task. It many times takes the “squeaky wheel to get the grease”… The unfortunate part of that is, it is nothing more than you were entitled to begin with… after 3 months.
Business is good. I?m about to go part time at my day job so I have more time to do deals. I can?t wait to crank the mobile home business up a couple notches, and eventually take it full time. The refinance was a crucial step to getting there, we would not be denied! I?m looking forward to joining the ranks of the full time investors.