Appraiser Won't Consider Third Bedroom?

[Ayame]

I purchased my home in 2011, got a Heloc line of credit in 2015, refinanced in 2016, and now we are refinancing again to get out of FHA/Mortgage insurance. The three appraisals that we got for the purchase, heloc, and refinance all considered our home a 3 bedroom 2 bath (one even gave us credit for a half bath in the garage but I don't think either of the other two did). I just got the appraisal on Friday for this latest refinance and I thought he made a mistake because he listed our home as a 2 bedroom, 2 bath and all the comps were 2bed 1 or 2 baths. When I contacted him, I let him know that the third bedroom is actually a bedroom with a closet but we just had a lot of boxes in there covering the closet. I took a picture and sent it to him.

His response was that it doesn't matter if there is a closet and that he didn't consider it a bedroom because you have to go through the living room to get to a bathroom. I'm baffled - how can three other appraisers consider it a bedroom and one not? That severely changes the value of our home - 2 bedroom homes just don't sell as well as 3 bedroom homes. Also, I checked the Florida building codes and it says a bedroom is a room of a certain square footage, with two means of escape, and a closet.

So to me that means it DOES matter if it has a closet and it DOESN'T matter if it is near a bathroom. I sent our lender my protest and provided 3 comps of 3bed/2bath using the appraiser's method of adding/removing value to get to a final comp value.

What are your thoughts on whether a room is a bedroom or not? Do you think the appraiser would be willing to change the appraisal? Does it hold weight that three other appraisals on the same house were for a 3 bedroom home?

Your insight is most appreciated!

 

[Michigan CG]

Most people will not be able to help you with this question as we know nothing about your market, your town or your neighborhood. Additionally we know nothing about the home like the age, the layout, the style or how other properties in your neighborhood are laid out, the ages and the styles.

The simple answer to your question would be "would the market (buyers) recognize this as a bedroom or not, and if not what would the market (buyers) call it".

You have multiple appraisals that count your house as a 3/2. Lay out all of them together and compare the reports. Or better yet, you might want to hire someone to look at the most recent report and supply them with copies of the older reports to look at. You can find someone to do the review at www.appraisalinstitute.com.

Another thing to consider is how your appraisal was ordered. Does your lender use an AMC (Appraisal Management Company)? Was the appraiser local? I am very skeptical of the AMC business model and think most of them are dishonest and a bad thing for the consumer. Ask you lender how much of the fee you paid for the appraisal actually went to the appraiser. They will know this answer or can find out.

 

[Dublin ohio]

Another thing to consider is how your appraisal was ordered. Does your lender use an AMC (Appraisal Management Company)? Was the appraiser local? I am very skeptical of the AMC business model and think most of them are dishonest and a bad thing for the consumer. Ask you lender how much of the fee you paid for the appraisal actually went to the appraiser. They will know this answer or can find out.

To OP. My bold. Really the only item that means anything in your situation. Some AMC's will use the cheapest and fastest. Even if they are coming from miles away and not thoroughly familiar with your market. As far as the rest of the rant goes. I do agree that the AMC model may not be perfect. But as inferred. Just because an appraiser does work for an AMC does not mean the appraiser is dishonest or not qualified. Plenty of questionable appraiser's around that do not work for AMC's. AS far as getting a review done. Probably will not do you much good in disputing appraisal with lender. You said you sent lender sales of 3/2 homes. Were you able to determine whether or not any of them had similar floor plan. Those would be the best to support your argument with lender

 

[ucbruin]

Start by checking the assessor's data....

I wouldn't be concerned about the distance the appraiser had to drive to get to your property.....

 

[Mr Rex]

It can be considered a 3 bedroom home, but as the appraiser noted, there is a degree of functional obsolescence due to having to walk through the Living Room to the bathroom. While this may not be uncommon in older homes, in most homes built over the last 40-50 years, the bedrooms are closely located to the bathroom for late night convenience and to avoid having to walk through a living room potentially full of non family members to get to the bath. So it might be considered a 3 bedroom but have the same functional utility and overall value as a typical 2 bedroom home.

 

[azbassman21]

Did they use any 3 bedroom comparable sales? Did they apply an adjustment for 2 versus 3 bedrooms? I've had people flip out on me before as well for the 2 versus 3 bedroom argument, when no adjustments were made anyways as there did not appear to be any market reaction to the difference.

 

[bnmappraisal]

Did they use any 3 bedroom comparable sales? Did they apply an adjustment for 2 versus 3 bedrooms? I've had people flip out on me before as well for the 2 versus 3 bedroom argument, when no adjustments were made anyways as there did not appear to be any market reaction to the difference.

Very true

I've run across this often in some neighborhoods in my area where 2 vs 3 BR doesn't matter due to GLA and utility (often a 2 BR with "den/office" vs 3 BR no "den/office")

To the OP, the bath garage (1/2 bath) is also not uncommon in my market. Is this bath located just off the "3rd BR" ?

What are your thoughts on whether a room is a bedroom or not? Do you think the appraiser would be willing to change the appraisal? Does it hold weight that three other appraisals on the same house were for a 3 bedroom home?

Your insight is most appreciated!

What part of Florida? What city/area? (DO NOT POST YOUR ADDRESS)

 

[Elliott]

Avame,
Did the appraiser 'adjust' for the two bedrooms? Or did the appraiser use 3 bedroom coparables and not adjust? If the appraiser only adjusted for living area, then it probably really didn't make any difference in the value opinion. Just saying.

 

[RSW]

To OP. My bold. Really the only item that means anything in your situation. Some AMC's will use the cheapest and fastest. Even if they are coming from miles away and not thoroughly familiar with your market. As far as the rest of the rant goes. I do agree that the AMC model may not be perfect. But as inferred. Just because an appraiser does work for an AMC does not mean the appraiser is dishonest or not qualified. Plenty of questionable appraiser's around that do not work for AMC's. AS far as getting a review done. Probably will not do you much good in disputing appraisal with lender. You said you sent lender sales of 3/2 homes. Were you able to determine whether or not any of them had similar floor plan. Those would be the best to support your argument with lender

I don't do a lot of AMC work, but, I get really sick of appraisers saying that AMCs choose the fastest and cheapest. It sounds to me in the OPs case that the appraiser took more time than the fastest and cheapest would have done. It is difficult to find 2 bedroom home sales in some markets. So, additional research was most likely necessary and he/she had to explain what was done and why.

I don't actually agree with the room not being called a bedroom and tend to agree with Rex on this topic. More information is needed for us to actually give good advice. What is the age of the dwelling? What does the local market consider that type of utility to be?

 

[Dublin ohio]

I don't do a lot of AMC work, but, I get really sick of appraisers saying that AMCs choose the fastest and cheapest

I only stated the obvious. Like I said 'some" AMCs. Not all. Since you admit you do limited AMC work. It would follow that you have had limited exposure to AMCs. Do you think that the numerous posts in various threads about $250.00 1004s and appraisers coming from up to 100 miles away are fiction?