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Refi appraisal - what matters most

Discussion in 'Ask an Appraiser' started by yellowsub11, Apr 2, 2010.

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  1. yellowsub11

    yellowsub11 New Member

    0
    Mar 27, 2010
    Professional Status:
    General Public
    State:
    Texas
    Hi all! We are looking to refi our 7 year old home to a conventional (non FHA) loan and are worried about a few things that might count against us.

    What matters most on these types of appraisals and what really doesn't?

    A few hairline cracks in the mortar and brick veneer
    Post drywall repairs - spots where the paint doesn't match exactly
    Other cosmetic items like molding and door trim (cat scratches)
    Caulking around tubs etc...

    Would these things devaule our home and if so would it be by a siginifcant amount?

    Thanks so much! - Yellowsub :)
     
  2. Lobo Fan

    Lobo Fan Elite Member

    1
    Nov 28, 2004
    Professional Status:
    Certified Residential Appraiser
    State:
    New Mexico
    It depends on what is being used as comparables. Why not recaulk and paint the trim? Minor condition issues do not usually make a big difference. At 7 years old there is going to be some wear and tear. The carpet should be about a goner if it is original.

    Your bigger worry should be a lot of listings and no sales. Especially if they are short sales and repos. A few short sales will hurt you more than a little cosmetic issues.
     
  3. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    493
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    Yellow Sub.....Beatles fan?

    It is Friday night, a sort of holiday, so not a lot of people on here right now.

    Are you sitting down?

    None of those things is the most important. The lending world has changed for the worse in the last year and the most important thing about your appraisal is the lender you are using and the way they choose appraisers.

    If you are using BIG BANK lender they are using what is called an AMC (Appraisal Management Company) which typically picks the quickest and cheapest appraiser without regards to knowledge, education or proximity to your home.

    There are many appraisers who have little experience and education (there are also a lot that do). I suggest you talk to your lender and ask how the appraiser will be chosen, where they will come from and ask for a list of qualifications.

    Ask for, in writing, how much of the fee you are paying for the appraisal will actually be paid to the appraiser.

    It is not uncommon for the AMC company to hire an appraiser from 100 miles away because he/she will do it cheaper than the local guy.

    Your first goal in getting your house appraised is that your lender will use a geographically competent appraiser who thoroughly knows your area, is educated and is not the cheapest guy on the block.

    After that you can worry about the items you listed.

    Don't let your bank and their AMC take advantage of you. It happens every single day, thousands of times.
     
  4. Metamorphic

    Metamorphic Senior Member
    Gold Supporting Member

    65
    Mar 15, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    California

    Things like that get rolled up into an overall rating of "condition". The overall condition of your property will be compared to the condition of comparable properties in your neighborhood. Typically an appraiser will have, based on their experience, and idea about what an "average" level condition is in a neighborhood or market segment. Properties that are significantly less well kept might be considered "fair". Properties that are so far below average that the typical buyer for that kind of property would not consider the place habitable are and would probably remodel before moving in are described as "poor". Going in the other direction, better than average maintained properties would be "good", and if basically new would be described as "excellent".

    If you look at the spectrum from new (excellent condition) you've only got 4 steps down to junk ready to be replaced/redone (poor condition). With only 4 steps to work with you really cant move a property from one spot to another based on a little trim paint and tub caulking; its just too small a thing to consider. Now, when you consider that those kind of fine details are not going to be know to the appraiser to regarding the comparables you see why we really cant make value differences on those small things. Its like trying to pick between two pieces of fruit, one in your hand, the other 20 yards off. Sure, you can see all the bruises on the piece you're holding, but who can tell which is better because you cant see the other well enough to see the bruises.
     
  5. yellowsub11

    yellowsub11 New Member

    0
    Mar 27, 2010
    Professional Status:
    General Public
    State:
    Texas
    Thank you all very much for the input! I really appreciate the help!
     
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