Posted by Randy Banks on November 06, 2000 at 07:20:36:
Bobby,
Ed is right that appraisers must comment in their reports on all prior sales activity in previous 12 months. The appraiser would have to comment as to why his opinion of value is so much higher than recent sale of property. There might be a reasonable explanation but the appraiser would have to deal with significant inconsistencies.
As to contesting the appraiser, do not hire your own, as most lenders always demand that appraisers on their own list be used. This is because the appraiser is advising the lender, not you. Do get a copy of the appraisal and examine the comps and adjustments made by the appraiser. Did appraiser use the most recent comps from your neighborhood and most similar. If you have better data, you can submit that to the lender and ask for reconsideration. Appraiser’s conclusions are not etched in stone. I know, as an appraiser, if I am furnished better data I can and will reconsider my opinion of value.
We have a rent house and got back banks apprasial of house…it only came out to $36,000 and in past six months houses in six block area of house have a CMA of $48,750.
We asked for a equity line of credit of $15,000 before apprasial, funny how banks apprasial came back at less than 50% of their appraisers value of house…We rehabed house and 3 year L/O it for $59,000. there is a 10% rate of appreaciation in this houses area. We bought house for $30,000, not bad for two months work.
Just wanted everyone to know banks apprasials come in very low to CMA average.
My question is why do banks play this type of game with us? Do they think we are stupid and don’t know what house are selling for in our area of operation?
Second, question, would it be better to hire our own apprasier for house and will bank except our appraisers value on house we pay apprasier for?
Has anyone else had this problem with banks trying to get a equity line of credit with them?
Re: Apprasial lower than CMA! - Posted by Ed Garcia
Posted by Ed Garcia on November 05, 2000 at 11:58:04:
Bobby,
There is something that you forgot. If you bought a house 2 months ago, chances are, it’s going to be it’s own comp. This is something that many investors are forgetting, when doing a deal. The first thing the appraiser will pick up is the subject property. Today lenders are concerned about flips and are looking at the property history of ownership more than ever before.
Yes, Lenders are looking to see if investors flip a property…those L/O is kinda a flip, it’s not like a real flip but some could argue that point.
When we took the comp in this area…we had not purchased the house at that point in time. We asked our realtor to give comps for the area before we bought the house…that’s why we bought the house it was well below the comp for the neighborhood. Luckly we were able to lease option it so soon.
I may be wrong but correct me if I am, as I am learning. One only uses an apprasial if one wants to borrow against the property. and Use comps for the area when one buys investment property. Comps to buy and apprasials to borrow money…is this right?