Believe I Am The Victim Of Incredibly Unfair Appraisal

[George Hatch]

You don't really say much about what the other comparables were like, so when an appraiser picks the sale that is least similar in overall size and then gives it more weight than the other sales that is an attention getter.

When you add into your description the impolitic comment that you said the appraiser made

"He said nah houses that old are only worth about 88k and the updates can only add so much value. "

along with the lender declining to send another appraiser out, these little factoids start to add up.

Reading between the lines I can think of a couple possible reasons why an appraiser might consider that smaller home to be a better indicator of value, but there's no point in getting into a bunch of speculation about that.

With that said, sometimes what you see is what you get, and maybe there are big problems with this appraisal.

 

[Terrel L. Shields]

I just don't want to raise a stink with the bank if my assessment is inaccurate

Nothing wrong with asking them to reconsider or at least review it. You have questions, they should be willing to answer.

 

[Michigan CG]

What are the UNADJUSTED values (at the top of page 2) and the ADJUSTED values (bottom of page 2)?

 

[Bonesteel]

What are the UNADJUSTED values (at the top of page 2) and the ADJUSTED values (bottom of page 2)?

Comp 1
996 sq ft
Sale price 116,500
Adjusted price 123,580(value assigned to my house)

Comp 2
1201 sq ft
Sale price 143,000
Adjusted price 133,080

Comp 3
1268 sq ft
sale price 130,000
Adjusted price 113,140 (this is the least comparable based on number of adjustments all significant $ amounts against me and all unsupported by the other comparables)

Comp 4
1368 sq ft
sale price 164,900,
Adjusted price 148,600

Comp 5
1199 sqft
Sale price 165,400
Adjusted price 146,266

The adjustment value would lead one to believe that comp 1 is most comparable, but a look at the adjustments will be seen to be all against me, at higher$ than market supports ( pairing comps shows those adjustments make little difference) and none other than sq ft made in my favor, at a significantly lower $than the market supports(pairing comps shows a much larger adjustment needed)

 

[Michigan CG]

HYPOTHETICALLY, If I were looking at what appears to be a fairly easy home to appraise and considering the size of the home it should be fairly easy unless you live in a very rural area. HYPOTHETICALLY I would say there had better darn be well a VERY long reconciliation of the Sales Comparison Approach considering the ADJUSTED sales range from $113,000 to $148,000. That is a $35,000 difference or 24% difference from $148 to $113 -- 31% from $113-$148.

I cannot imagine EVER turning in a report with that much of a percentage spread. In MY MARKET I would consider the appraiser to be a complete idiot unless there was a full page of narrative telling the reader where that random number came from.

ADDITIONALLY.............the lender or AMC or both should have identified this very large spread. Is there an AMC involved? If so who is it? The AMC would be listed right above the appriaser's signature.

 

[Bonesteel]

In my untrained opinion (shared by 2 realtors) the other comps don't have much if anything overall on mine, they all have nicer driveways and maybe slightly better overall exterior appearance, but the interior of mine is significantly nicer on all comps that I have seen (comp 5 I did not see when brother was shopping)some had slightly nicer kitchens but nothing significant, mostly wood finish vs painted cabinets, and none of them came close on the bath room or master bedroom

 

[Carlos Danger]

If he used $123,580 as the final value, he must be very sure of his accuracy. There is no excuse to act like that at the inspection.

 

[George Hatch]

What year were they built? That might be a big factor.

Here are the elements that stand out most to me in your original description

- The core of your home - the most expensive portion to build - was built in 1946 and was 5756sf, possibly a 1bd/1ba floorplan. The subsequent additions were added after that.

- The appraiser's comments about older homes topping out at $88k would have amounted to $152/sf for a 576sf home, that factor being comprises partly of the land value and partly of the improvements value.

- the subsequent comments about improvements only adding so much to a particular property type are absolutely true. Until you get to the highest value ranges where money is no object it's real easy to add a higher quality interior or higher quality kitchen or excessive outbuildings than fits the market in which the subject would most commonly compete.

- So if the proposition here is that the 576sf house with multiple additions is directly comparable in the market to another home that started and ended at 1260sf, I've basically never seen that in real life. The bones in the core of your home on its foundation are still 70 years, and - unless it was all changed - so is the exterior design, the floorplan and room sizes of that portion of the home.

- I have no idea if this is the case but if your home is part of a post WWII subdivision of homes of that size, age and design then the effects of everything in your immediate neighborhood on the maximum values that neighborhood will support in the market are significant.

- If the only sale among the comps that's in that age range and in a comparable neighborhood is S#1 and the others are all newer in design and construction and are in neighborhoods of homes that are similar to them then that might explain why the appraiser thought S#1 was more indicative of your value than #2, which is the next smallest home.

- Based on the pricing and as a group , those sales don't appear to be that similar to each other. That situation raises questions of its own. When S#2 and S#5 have a 12% spread in value and it's not in the size of the home then something else is going on. When S#3 sells for 9% less than the slightly larger S#2 then something else is going on.

 

[Joe Flacco]

Nothing wrong with asking them to reconsider or at least review it. You have questions, they should be willing to answer.

What is a review going to find when they assume anything SR-1 related is good? SR-3 reviews are pointless.

 

[Mr Rex]

Are comps 4 & 5 closed sales or listings?