Lousy appraisals. - Posted by The Baze


#1

Posted by Mark (SDCA) on October 19, 1998 at 09:14:52:

I am not familiar with this particular case but I stick by my original point. Appraising is as much guesstimate as “fact”, but at some point (either hi or low), an appraisal is simply wrong. I don’t pay people to do a job. I pay them to do it right. If a roofer fixed my roof but the roof still leaked then I would 1) ask him to fix it and 2) sue him if he didn’t. If the appraiser can justify his appraisal (and his justification is reasonable) then that is fine. But if his houses are too dis-similiar from the subject house and he didn’t account for that or his sales data is stale or his comps are too far away etc then he MUST be responsible.

Another thought is that you can call the licensing organization at the state to complain as well.


#2

Lousy appraisals. - Posted by The Baze

Posted by The Baze on October 15, 1998 at 11:00:27:

Bought a house a couple of weeks ago that I KNOW is worth $53,000. Seller is holding the note for 90 days so I can refinance. The appraiser comes out and appraises it at . . . $38,000!!! Are you kidding me?! The darn thing appraised 7 months ago for $51,500 and that was BEFORE the owner added CH/A and replaced the roof. I’m friends with the owner of the house next door and his house is 65 sq. ft. smaller than mine and his appraised for $50,000 in July 1998. I had never used this appraiser before but they came recommended from a fellow investor. So I call and rais h### with them, and their only answer is “We’re hired to give our opinion of value. Sorry if our opinion differs from yours.” Now I know that technically htis is correct, but there is NO WAY that house is worth less than $50K. This is slowing down my refi, because I have to order a new appraisal and shell out another $300. Someone please tell me that there is at least some accountability on the part of the appraiser. Please tell me I have some avenue to pursue, because my first instinct (I’m an ex Marine) is to kick the s*** out of someone. While $300 isn’t a fortune, it is gas money for a month and I want it back.

Tom Bazley


#3

Re: Lousy appraisals? Not if I can help it :slight_smile: - Posted by Mr Donald (NORVA)

Posted by Mr Donald (NORVA) on October 17, 1998 at 21:45:32:

Baze,

Here’s what I do to ensure that I receive a fair and justified appraisal.

Simple. Make the appraisers work easier. Give them what they want, if you have it.

A copy of the survey for starters. Add a copy of the floor plan for the house or unit to be nice as well.

Researching the comps for the appraiser is also a nice touch, and can’t hurt. Is the appraiser bound to using your comps - not necessarily. But will the appraiser look at them? Perhaps. :slight_smile:

You’re paying for the appraisal, I presume - so make certain that you receive a copy when all is said and done - and put this in your Contract to ensure that it is released to you for review. They may not like it - but seek and ye shall receive.

Get the Fannie Mae Uniform Appraisal Form in .pdf format (Acrobat) from their site at: http://www.fanniemae.com/singlefamily/doingbusiness/forms/2055.html

Print it, fill it out, and use the three comps that you best support your best “guesstimate” for the appraisal value of your property.

If you have the Listing Summary, or Public Record information on your property, and your comps, then attach that as well.

Fax it off to the appraiser if you know who will be doing your appraisal - or meet the appraiser at the property when it’s being conducted, and give them the information - just tell them that here’s some additional information about the property and the neighbourhood for your records…but do not unduly or overly influence them or suggest what they should do with it - they know, and certainly wouldn’t appreciate it either!

(High comps suggest an appraisal on the high side, low comps on the lower side… :slight_smile:

Cover yourself with a clause in your Contract that specifies that a. if the Appraisal does not meet the lender’s approval the Seller pays for it b. you receive a copy of the Appraisal for your review c. if the Appraisal does not meet the lender’s approval or YOUR approval, you can i. you can alternatively negotiate a lower price with the Seller as a result or ii. declare the contract null and void (and get your deposit back).

Have fun!

Mr Donald
dlm@bellatlantic.net


#4

Re: Lousy appraisals. - Posted by Rob FL

Posted by Rob FL on October 17, 1998 at 18:50:08:

In the future you may want to be at the property when the appraiser walks through it. That way you can point out the goods and bads of the property. Also have a few comparables handy to give to the appraiser. It makes they’re job easier and may help you out as well. Finally, if there is a sale involved give them a copy of the contract so they know the price you are looking for.


#5

Re: Lousy appraisals. - Posted by Nancy(NC)

Posted by Nancy(NC) on October 15, 1998 at 18:49:57:

Tom:

I know EXACTLY how you feel. We had a very low appraisal done recently on a condo we wanted to refinance. The mortgage company suggested we get a second and said they “may” average the two together. I got the second, which was much more correct, and they did end up averaging the two together. The original appraisal was based on comps only in MLS and more than 6 months old when others I had gotten myself at the tax office before I applied to refinance had sold for more and more recently. His comp properties were not even similar except they were condos also but he had already gotten paid so could have cared less.

Good luck!

Nancy(NC)


#6

Re: Lousy appraisals. - Posted by phil fernandez

Posted by phil fernandez on October 15, 1998 at 17:49:46:

Baze,

Dig up some recent sales for your comparables and show them to the guy that did the appraisal. Also take a good look at the three comps that he used for your appraisal and see if they are actual comps. Question the appraiser on his use of the three comps and his calculations.


#7

Re: Lousy appraisals. - Posted by DanO

Posted by DanO on October 15, 1998 at 13:01:08:

If you are mad enough, hire a review of his appraisal. Specifically direct your review appriaser to look for USPAP infractions as well as technical accuracy and appriasal assumptions accuracy. If his technical or market assumtions are incorrect he must justify or “fix” his appraisal. If he is violation of USPAP, well you’ll just have to take that up with the licensing authorities.


#8

Re: Lousy appraisals. - Posted by Mark (SDCA)

Posted by Mark (SDCA) on October 15, 1998 at 11:08:44:

I had EXACTLY the same problem last week. I raised h#@$ with the loan processor. And I backed up my claim with facts (a house on the same street as ours with less square feet and fewer bedroom AND fewer bathrooms just sold for 22% more than the appraisal we got. That is flat out wrong.) Here are my suggestions.

  1. Call your loan processor immediately. They want to make the loan and need a correct appraisal to do so. A wrong appraisal (either hi OR lo) helps no one.

  2. Call the appraiser at once. Give him your rationale for why the appraisal should be higher. Make him justify his low one. Go over his comps. Why do you think they are not true comps? Too far away? Too dis-similar? Sales out of date? etc.

  3. If you haven’t paid the appraiser, don’t. If you have, try to stop payment on the check. You wouldn’t pay a contractor who did a shoddy job on repairing your house. Appraisers should be held to some kind of a standard.

Bottom line: Stand up for yourself and make the appraiser get it right. Hope this helps…

Mark


#9

Re: Lousy appraisals. - Posted by JohnG

Posted by JohnG on October 16, 1998 at 22:29:25:

I have never been successful in getting an appraiser to change their figures based on new information.
It almost seems an unwritten rule that once they commit to a value they have a real vested interest in maintaining that number. I got around that (after having to get more than one appraisal) by making sure that (a) I had the comparables already listed that I wanted him to look at and (b) I made sure that he had a copy of the offer in hand and I would ask him before he started whether he would have a problem coming in close to my value. If he could not, I would bid him a Paul Harvey “GOOD DAY” and get another appraiser out the next day. It has worked very well most of the time.


#10

Re: Lousy appraisals. - Posted by The Baze

Posted by The Baze on October 15, 1998 at 11:46:02:

Mark,

Unfortunately, the check already cleared. In fact, they wouldn’t release the appraisal until that had happened. I’ve demanded my money back, to no avail. I even told him that as the treasurer of my local REIA, my word carries some weight, and that I would do my best to see that no one in the group ever uses them again. He didn’t seemed fazed. That’s why I want to kick the stuffing out of him.

Tom Bazley


#11

Re: Lousy appraisals. - Posted by Mark (SDCA)

Posted by Mark (SDCA) on October 15, 1998 at 19:59:52:

Take him to small claims court. He did shoddy work and should not be paid.


#12

Re: Lousy appraisals. - Posted by Bud Branstetter

Posted by Bud Branstetter on October 15, 1998 at 11:56:21:

There is always small claims court. Or go big time with deceptive trade practices. The burden of proof will be on you to show they violated some rule of their guidelines. Then there is their state licensing. They may have some complaint proceedure.

Heck, I’ll chip in $20 if you go after them.


#13

Re: Lousy appraisals. - Posted by JohnG

Posted by JohnG on October 16, 1998 at 22:35:32:

I don’t know if you would have a case. The person was paid to do an “appraisal” and that is what they did. The fact that they came in way lower than you wanted would be considered by Judge Wapner as his “appraisal” and I’m sure the appraiser could cite his 2 or 3 comparables as why he came in on that figure. I find it interesting that in many cases there is a fairly large spread between comparables in any given area and one could use the lower numbers or concentrate on the high end numbers.