Low Appraisal - So Bummed To Say The Least

[lucyem]

We bought a house 6 years ago at a very low price. This was before the big upswing around here. People were amazed at the deal we got. We ended up tearing down the existing shell (lead paint, no insulation, structurally unsound) house and building a new solar house. A real house, that looks like any other, but on the grid but with solar. Energy Star rated and architecturally designed. We have a horse barn with indoor arena, a cottage, amazing views (all this was here and unchanged). We had to refinance in May so we could finish the house. The appraiser came and said we had to finish the house before we could get the loan. (type of loan depends on house being done and we have very limited options due to income level) So we dug out every bit we could and somehow managed to find help and got the house 90% done. The appraiser came back last month and after a lot of hemming and hawing and having no comparables he finally turned in the appraisal. (you should see the comparables he came up with - they dont) The appraisel less then what we paid for the original property. Its is less then half of what 6 different agents say we could sell the house for even in this bad economy. It is less then what the house alone cost us. It is the same amount the last appraiser appraised only the land at. It is so low the refinance is now a no go. This means we cannot refinance. It means we are stuck until we can get the cash to finish the house so we can sell it. It means my son will get transferred to therapy within this town and I wanted those fools no where near my child. It means at least this year and most likely next year too of 2 hours a day of driving for me. I have no idea what we are going to do. Even our loan officer is shocked.

[Melda]

can you get another appraisal ??? can you go to this guys boss ??? It seems like there should be something that he can compare it to...

We are also in an area with little to no comps for what we have ... good thing we are not in need of an appriasal at this time though ....

[phatchristy]

You're going to have to get another appraisal. The guy sounds like he is clueless, and it sounds like your home is unique and has special attributes he is NOT recognizing : .

So sorry!

[Eman'smom]

I agree get another appraisal.

[JessicaS]

They had an appraiser issue with my house at first as well. My house is an earth contact home and there isn't another one around here like that.

You need another appraiser, that person doesn't know what they are doing.



I know it is annoying, we went through a very similar thing but a more experienced and knowledgeable appraiser will fix it right up.

[Doodadsmom]

Residential appraisals often vary widely depending on who's doing the appraising. Definitely get another one. Try to get it through a bank though - they won't use one you've ordered yourself.

[Arduinna]

What a realtor says it's worth doesn't mean squat. What you paid for it, doesn't mean squat. What the house you tore down was worth doesn't mean squat.

It's really difficult to adequately support the value of a property through comps if there are no reasonable comps, such is the problem of unique properties. And while the cost analysis is used also in any SFR appraisal it really is not something that any lender will base a loan on. Additionally your loan officer only cares about getting his commission, whereas the underwriting dept cares most about not getting stuck with loan they can't sell and in this market is at risk of being or ending up upside down. This is a product of too much creative financing and when markets start to stink underwriters get picky.

It is so much more complicated than " he doesn't know what he is doing".

[JessicaS]

Yes, there is more to it than that, but we just went through something similar when we were buying our house.

The loan was initially denied because of problems with comparisons and then another appraiser came in and all was roses again.

[J-Max]

My dad is a real estate appraiser, and you need to get a new one! I know my dad has worked on some appraisals that took many, many hours to find comps on, but it can be done. Good luck, I hope you find a better appraiser.

[Arduinna]

Of course things can be all roses again. It's called pressure. I can't even tell you the pressure that happens to make appraises fix numbers so that loans will happen. This was the direct cause of the S&L disaster in the 80s which resulted in nationwide changes in government requirements for loans and liscensing of appraisers and revamping of education.

And guess what, it didn't change a freaking thing. Independant appraisers are blackmailed by not being given more work if they don't come up with the numbers and staff appraisers are totally beholden to their bosses for the same thing.

I mean sure I can pull some bullshit number out of my ass and make a comp adjustment. And no one will question it. Well underwriting might given the right circumstances of pressure by the government in tightening regulations on the loans they buy, which is what most lenders rely on to keep the lending economy up. It's still totally freaking unethical.

[JessicaS]

Well, the number the new appraiser got matched the one with the county, so either they are matching buddies or they used the county appraiser.

ETA: our city and county offices are together

[HollyBearsMom]

Originally Posted by Arduinna

What a realtor says it's worth doesn't mean squat. What you paid for it, doesn't mean squat. What the house you tore down was worth doesn't mean squat.

It's really difficult to adequately support the value of a property through comps if there are no reasonable comps, such is the problem of unique properties. And while the cost analysis is used also in any SFR appraisal it really is not something that any lender will base a loan on. Additionally your loan officer only cares about getting his commission, whereas the underwriting dept cares most about not getting stuck with loan they can't sell and in this market is at risk of being or ending up upside down. This is a product of too much creative financing and when markets start to stink underwriters get picky.

It is so much more complicated than " he doesn't know what he is doing".

My husband is a mortgage broker and I have to agree with Ard on this one. Yes you can have wide variances between appraisers but with the mortgage/refinance being what it is today every bank is taking along hard look at all the details. A second appraisel may help but even so the bank/company you apply for a loan with is going to send their own appraiser anyway.

[Arduinna]

With all due respect, if I wanted to to, I could almost match any number I needed. But it would be totally unethical and it wouldn't be accurate. And don't kid yourself, when appraisal requests are sent out it includes the lending info. We know exactly how much you need to make your loan and be all happy smilie face. Sometimes those numbers are crap though and completely unrealistic to the realities that appraisers should be working with, which are true comps and recent sales. Appraisals will only be truely accurate once they are blind appraisals with no info from lenders and no pressures to meet numbers. The thing is no one really cares because appraisals real job is to support the economy even if it's a false one that results in things like the 80's crash.

[ShaggyDaddy]

Originally Posted by Arduinna

This is a product of too much creative financing and when markets start to stink underwriters get picky.

It is so much more complicated than " he doesn't know what he is doing".

It is against the law for underwriters to influence an appraised value. It is not against the law for risk averse banks to use infamous lowballer appraisers.

[mightymoo]

I would see if I could get the lender to use another appraiser and failing that I would just pursue another lender, they are going to to their own appraisal and it may come out differently.

I might also talk to a mortgage broker rather than directly to a bank. Since the broker resells the loan to the bank, its in their best interest to get the loan financed, they may be able to work with the bank a little bit, for example they might know which appraisers are notoriously low and steer you to a bank or appraiser that isn't so bad, etc.

[lucyem]

My husband found serious issues with the appraisal. He is waiting for a call back from the appraiser. Even the appraiser has said repeatedly he knows the appraisal is waaaay low. (gee thanks, you could have at least given us the figure we needed) Part of the issue is the kind of loan. He has to make our house "fit" into a certain box as required by the bank. So he cannot give us a market value appraisal. I have no idea why but this is what everyone is telling me. He cannot look at the value of the barns & cottage and once again I have no clue why but that is what I am being told. There is no guarantee we will not be turned down if we do not take what we can get now due to national mortgage issues. We might be able to get a new appraisal but we will come up against tighter requirements. Its crazy, we had a land appraisal done 5 years ago (no house included) and it came out at the same amount and to top it off the appraisal is less then what the town assesses us at! Anyway we are now stuck. We still do not know if the underwriter will turn us down completely or will just cut the loan down. If it gets cut to where our loan officer thinks it will it will be pointless for us and not help in anyway. Then we are back to square one.

[KnittingShaker]

To me it sounds like you might be out of luck. If you're house is truly "unique" for the area, then that can be a big, big problem. An appraiser pulls comparables-recent sales of houses that are very similar to yours. If nobody else has an indoor riding arena, you might have a white elephant. No lender, particularly in this market, will touch something like that.

It's not as simple as getting another aprraisal, either. If a lender has already seen one appraisal, they are not going to accept a wildly different version.

Not knowing much about your community, I think it's lucky they didn't flat out deny you based on your property.

[blueridgewoman]

You should absolutely get another appraisal-- $400 or so is not going to hurt as much as keeping the one you've got now, apparently. I would begin to call any agent you feel would give you a market value and get one. Then, I would enlist the help of your lender and see what he or she thinks. It's not a one shot deal, and it sounds as though there were some weird judgement calls made with comps (boy can I identify....) etc.

When I got the other appraisal, if it was off again (or even if it wasn't), I would present the market assessments done by the agents and the land appraisal with it.

The other issue here is that if your lender is siding with the appraiser and not willing to work with you and go to bat for you considering all these issues, you need to find another lender. Like yesterday.

[KnittingShaker]

Originally Posted by blueridgewoman

You should absolutely get another appraisal-- $400 or so is not going to hurt as much as keeping the one you've got now, apparently. I would begin to call any agent you feel would give you a market value and get one. Then, I would enlist the help of your lender and see what he or she thinks. It's not a one shot deal, and it sounds as though there were some weird judgement calls made with comps (boy can I identify....) etc.

When I got the other appraisal, if it was off again (or even if it wasn't), I would present the market assessments done by the agents and the land appraisal with it.

The other issue here is that if your lender is siding with the appraiser and not willing to work with you and go to bat for you considering all these issues, you need to find another lender. Like yesterday.

A market value by a real estate broker is completely different than an appraisal done for lending purposes. If a borrower brought in a market value and expected to use it as an appraisal they would get laughed at. Literally.

[lucyem]

Out of it all the part I find the most frustrating is the comps were not comps. I know we are totally unique. But the horse property part - I know of 3 that have sold in the area and not one was used as a comp. We have views and not one comp had views. The solar he would never find because there is no comparable. But the comp houses he did pull up all had less rooms, less bathrooms, less land. They are all 15-27 years older then our house. It makes no sense to me to take comps that in no way resemble any part of our property, use their sale prices in the past year, and tell me thats what my house appraises at.