'Bad appraisal' dims financing options
Letter to the Editor
By Inman News, Thursday, August 27, 2009.Re: 'Low appraisals sabotage more deals' (Aug. 26)
Dear Editor:
I am a Realtor, but we are experiencing an appraisal nightmare with our own home. In the process of trying to close out our construction loan, a new appraisal was required. Preconstruction, we had two appraisals that came in at more than $500,000.
Knowing the market, I knew that values had dropped a bit, but our new appraisal, post-remodel, came in at $280,000. The comps were in the area, but not "comps" at all -- just houses chosen to get the job done. The square-footage was off; the condition was completely different; etc. This did not just affect a purchase or sale -- we are trying to figure out how to finance the home that we have lived in for years. Oh yeah, the house behind us is also being remodeled. In our neighborhood, you don't remodel to sell; you do it to stay in the area -- which does not help for appraisal purposes.
We are currently searching for a new lender. This bad appraisal has caused a great amount of stress. Smaller homes in the neighborhood have sold for more than our appraised value, but they did not consider those at all when I tried to dispute. A bad appraisal has also hurt a good lender that we had a longtime relationship with, but need to search for new financing.
This system needs to be changed.
Mary Anderson
Realtor, Coldwell Banker Burnet
St. Louis Park, Minn.
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Submitted by Barry Noble on August 28, 2009 - 9:11am.
The AMC's won't use local appraisers and don't want to pay long experienced appraisers their normal, reasonable fee - 'cause they want part of the fee for themselves then often add more $$ to the fee and claim that's what the appraiser received.
Established and knowledgeable local appraisers won't work for less than survival fees. You'd be surprised how many appraisals we have to do each year to just cover all the association, business, MLS, realtor, insurance and other fees we have to pay. If the survival fee is $350-400 - can you blame the established appraiser for refusing $250 and a 24 hour turn around - which ruins accuracy?
I just did an appraisal locally to counteract the problem caused by an appraiser coming in from out of town - who's office is 180 miles away - who used comps from a nearby high end resort city for an older, "shell" of a house in a much lower valued tract and city. The property was stripped-out, awaiting reconstruction of its interiors - because of the large lot, the value should have been in the lower $300,000 range - the out of towner Appraiser, totally ignorant of the area, trends and types of properties, said it was worth in the upper $600,000 range....so the mistakes work both ways, high as well as too low.
Realtors need to support the local appraisers, not blame them. I have never been manipulated by a lender in 18 years. Yes, I've refused work and moved on if a lender tried it - but I was doing 5-6 accurate and highly detailed and successful appraisals a week comfortably. Now I am doing one, sometimes two, if lucky, a week and mostly not from lender's AMCs - but for lawyers for estate, tax, divorce and other reasons.
I love my work. I love appraising and am very good at it. If this continues, I will have to give it all up and return to being a RE Broker again - I much prefer appraising.
The HVCC debacle is putting good appraisers out of business left, right and center. Truly, truly a sad situation for the Real Estate Market, the buyers and sellers and their agents and, of course the Appraisers.
Senators! Congress-persons! HELP. PLEASE HELP! CANCEL OR CLEAN UP HVCC NOW!
Barry Noble
http://www.MyPropertyIsWorth.com
Palm Springs and the Desert Resorts of Southern California
Submitted by Robert Imerson on August 28, 2009 - 7:51pm.
California is one of the most famous states in the United Sates (even abroad). It was a place where famous people in the world of movie, sports and politics came from. It is also where famous businessmen are conducting their business. But the sad fact is that, amid of its prestige, the crime rate in California is high. For instance, the case of Jaycee Dugard. If it really is Jaycee Dugard, then it's practically a miracle. Jaycee Dugard, then she's also been gone for a long time. A woman went to the Concord Police Department and claimed to be Dugard, almost 20 years after she disappeared. Dugard was kidnapped from a bus stop in South Lake Tahoe, California in 1991, and despite her stepfather having witnessed the abduction, few leads came about and the case was consigned to the cold case files. Two people were soon after arrested. Obviously, it must be confirmed as Dugard through testing before anything else happens, but if actually is Jaycee Dugard – it's a miracle that she's alive, and that she got away, as no cash advance is big enough is able to bring some children back.
Submitted by Moshe Cohen on August 30, 2009 - 6:32pm.
http://www.valuationsolutions.net
NJ Tax Appraiser
I suggest that you go with a local regional bank that does not use a management company and treats their appraisers fairly.
Submitted by Chris Burdzy on August 31, 2009 - 8:29am.
I recently had an appraisal done on my own house, and the appraiser used three short sales as comps. I disputed the appraisal, and was able to get it modified.
Also, First American outsourced the appraisal to another company, which outsourced it to a local appraiser. Finally, I got billed $575 for an appraisal that used to cost $350.
Submitted by Mary Thompson on September 6, 2009 - 4:52am.
I am sorry to hear about your situation, but it could be the appraiser was doing their job...or as Barry Noble noted above, which is 100% true you may have had an inexperienced appraiser from an appraisal management company.
But if the appraiser is doing their job, consider the following:
Appraisers do not determine value, the MARKET does.
Consider this....We have NO vested interest in the property we appraise (we shouldn't and if we do, we must disclose our interest) so why in the world would we under or over appraise a property? In the past lenders have always pushed appraisers for that HIGH number, some appraisers succummed to the high pressure and that is what started this whole foreclosure and mortgage fraud mess.
We are hired to protect the clients (banks or others) interst. We are just doing our job by REPORTING and ANALYZING the market..Period! There is no good reason why we would do anything else.
With HVCC now in effect, there are many appraisers working for 1/2 the fee with appraisal management companies and these companies do not really care about experience, they care more about your FEES.
I recently was removed from an appraisal management company's appraiser panel, because I refused to work for 1/2 my fee. In this day and age it takes alot more time to complete a quality appraisal and I do not believe in cutting corners.
I have over 16 years of experience, but that did not matter to them, they would not budge because in their own words they have other appraisers in my area that will do the reports for less....and they admitted to me that their fees are LOW!
That scares me! There is a concern about expertise out there and I am a firm believer that you get what you pay for in this world! If you are dealing with a person who travels 30-60+ miles to get to your home, chances are they have no clue aobut the inner workings of your particular neighborhood.
Does anyone want to know which lender (a big one) and Appraisal Management company I am talking about, just drop me a line!
Lakefront Appraiser
http://www.activerain.com/blogs/lakelanierappraiser
http://www.marytappraisals.com
Lakefront Appraiser
http://www.lakefrontpros.com
http://www.marytappraisals.com