• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Appraisal For A House I Am Buying

Status
Not open for further replies.

Melissa Burlison

Freshman Member
Joined
Aug 4, 2016
Professional Status
Certified Residential Appraiser
State
California
Folks - I am purchasing a new home with a sales price of $422,000. I got the appraisal and other than a lot of weird things I would never do (like making adjustments of $1,000 and $2,000 for +$400k house and not rounding adjusted values) I take real issue with the following:

The original appraisal indicated that the house I'm buying didn't have a built-in spa (with the pool) and that all the comparables utilized did have this feature. A negative $2,000 across the board adjustment was made for this. This was an error since the house I'm purchasing does have a built-in spa, and the appraiser even has photos of it in the report. I called this out in a rebuttal, as well as the fact that the appraiser did not make a 3 to 4 bedroom adjustment for houses of similar size that had no GLA adjustments. I wouldn't even consider one of these lower priced 3 bedroom houses during my house hunting, since I would much prefer a 4 bedroom house and I'm willing to pay more for this feature alone.

Now here's where it get's interesting:

In the original appraisal, the appraiser based his weighting on a comparable sale which was in the same gated neighborhood and which he states was most similar overall to the subject in terms of its location and upgraded condition. His adjusted value of this highest weighed sale was originally $420,932, and his appraised market value came in at $420,000.

In the second/revised appraisal, the appraiser made the $2,000 correction for the spa across the board, thereby bumping this originally highest weighed comparable up to $422,932. But what gets me is that he suddenly, out of no where, changed his weighting in his reconciliation to be based on a completely different comparable sale which was the same size as the subject but with only 3 bedrooms, and which was located in a completely different gated neighborhood, one mile away!! He did not make the requested bedroom adjustment to this sale, since he said this would be a double adjustment - even though he made no GLA adjustment!! His reasoning for changing his weighting to this comparable was that it had the least overall adjustments. This is surprising since it had the least overall adjustments in the first/original appraisal!! And to make matters even more suspicious, in this second revised appraisal, there is absolutely no mention of the originally highest weighted comparable sale in the appraiser's final reconciliation, which now stands at $422,932 (or $423,000). It's as if it just didn't exist.

I find this troubling and in my opinion a violation of USPAP since I'm completely confused and feel mislead by this appraiser's inconsistent and confusing basis for market value conclusion.

Am I just another ticked of buyer, or do I have a legitimate complaint? I would love your opinion. Thank you!
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
It would help to have more information on the errors, total. If the errors are cumulative to produce a lack of credible report, then yes.
 

Melissa Burlison

Freshman Member
Joined
Aug 4, 2016
Professional Status
Certified Residential Appraiser
State
California
It would help to have more information on the errors, total. If the errors are cumulative to produce a lack of credible report, then yes.
There weren't really a lot of "errors" other than the ones mentioned. He corrected the spa adjustment, but in his commentary on the rebuttal said he wouldn't make a bedroom adjustment because it would be like a double-adjustment with the GLA adjustment. I totally agree with this and don't make bedroom adjustments myself - if there is a GLA adjustment. But you can't tell me that the typical buyer (which includes me) won't pay more for a 4 bedroom house which is identical to a 3 bedroom house in terms of size and other factors. So I consider this to be an error. Other than these two errors, I cannot say there are more. I just find the switch of weighting to be an obvious statement that he does not want to change his reconciled value.
 

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
I just find the switch of weighting to be an obvious statement that he does not want to change his reconciled value.

Yes, I would agree that a change in weighting needs to be explained in detail. However, does it matter on the value conclusion?
 

Artemis Fowl

Senior Member
Joined
Mar 16, 2004
Professional Status
Certified Residential Appraiser
State
Michigan
Typical buyers won't pay more for a 4 bedroom house which is identical to a 3 bedroom house in terms of size and other factors.
Sorry...couldn't resist saying it. :ROFLMAO:

Depends on your market. I've not seen credible support for such an adjustment in mine.

So because the 3 bedroom was similar in sqft there should be an adjustment? What happens when it isn't similar sqft? Do you adjust for bedroom utility?
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
Am I just another ticked of buyer, or do I have a legitimate complaint?
Definitely not a personal attack, especially since I don't know you, but ... I think you're "just another ticked of(f) buyer" That's just my blunt opinion based on what you describe in your OP
It sounds like, from what you describe, the report is not overtly misleading. Were there errors in the original report? Seems like it. But none of what you describe seems to be egregious, just my opinion

but in his commentary on the rebuttal said he wouldn't make a bedroom adjustment because it would be like a double-adjustment with the GLA adjustment. I totally agree with this and don't make bedroom adjustments myself - if there is a GLA adjustment. But you can't tell me that the typical buyer (which includes me) won't pay more for a 4 bedroom house which is identical to a 3 bedroom house in terms of size and other factors. So I consider this to be an error
I would counter, b/c I run into this often enough in my markets - what are the overall room counts? Many times I'll have a 3 BR plus a den or family room or rec room or (whatever you want to call the extra room, that MANY people MAY use as a BR) vs a 4 BR without the "other room"
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
In the second/revised appraisal, the appraiser made the $2,000 correction for the spa across the board, thereby bumping this originally highest weighed comparable up to $422,932. But what gets me is that he suddenly, out of no where, changed his weighting in his reconciliation to be based on a completely different comparable sale which was the same size as the subject but with only 3 bedrooms, and which was located in a completely different gated neighborhood, one mile away!! He did not make the requested bedroom adjustment to this sale, since he said this would be a double adjustment - even though he made no GLA adjustment!! His reasoning for changing his weighting to this comparable was that it had the least overall adjustments. This is surprising since it had the least overall adjustments in the first/original appraisal!! And to make matters even more suspicious, in this second revised appraisal, there is absolutely no mention of the originally highest weighted comparable sale in the appraiser's final reconciliation, which now stands at $422,932 (or $423,000). It's as if it just didn't exist.

I find this troubling and in my opinion a violation of USPAP...
Am I just another ticked of buyer, or do I have a legitimate complaint? I would love your opinion. Thank you!

I'm not sure what the violation is? An appraiser can revise his/her opinion (which is what it sounds like was done based on the correction of the factual error you identified). The fact that it changed from what was before by itself is not any violation as I see it.
What only matters is, is the final value credible and does the report meet the reporting requirements?

I find this troubling and in my opinion a violation of USPAP since I'm completely confused and feel mislead by this appraiser's inconsistent and confusing basis for market value conclusion.
That would be troubling if you were the client.

I'm not trying to be snarky or trite.
The appraisal you received doesn't sound like high-quality. You are an appraiser and are much more knowledgeable about an appraisal report than the typical borrower. I get that (been there).
You don't seem to think the value is not credible (I didn't hear you say you think it was low); you don't agree with the adjustment-scheme or the comparable selection as applied (you think there should be an adjustment for a 3br vs. 4br home and you seem to be questioning the use of comparables one mile away). You may or may not be right. As an appraiser, you know how to support that conclusion better than most. You can analyze the data and submit it to the lender and ask for a reconsideration. If you believe you are right and if that difference is significant to your objective, then that's what I'd recommend you do.

Good luck!
 

erockinaz

Junior Member
Joined
Nov 20, 2013
Professional Status
Certified Residential Appraiser
State
Arizona
...as well as the fact that the appraiser did not make a 3 to 4 bedroom adjustment for houses of similar size that had no GLA adjustments. I wouldn't even consider one of these lower priced 3 bedroom houses during my house hunting, since I would much prefer a 4 bedroom house and I'm willing to pay more for this feature alone.

Unless I see market evidence of a difference, I rarely make adjustments for bedroom count. Oftentimes, the three bedroom with similar GLA is a three bedroom with a den/bonus/loft option and shares similar marketability with a four bedroom. Some people also prefer a smaller bedroom count with larger rooms that a higher bedroom count. It all depends on the situation.

FWIW, I have four kids, so I would prefer a four bedroom over a three, but most people don't have that many kids and don't need that many bedrooms.
 

Michigan CG

Moderator
Staff member
Moderator
Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
I have appraised single-family homes in three different states and there has never been a premium on four bedrooms vs. three when all other things are equal.

$2,000 adjustments on $400,000 homes is ludicrous.

It is rare that I place the final opinion of value on one comparable.

The guy must be REALLY good to opine $420,000 when the contract is $422,000. (Sarcasm)
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks