Appraising a detached condo in California

[quickly323]

Will try to make a long story short here so I can get your insights as soon as possible. Thanks in advance for the help. So I'm trying to re-finance my mortgage and I live in a detached condo in South Berkeley (CA). Some facts about the property:

- No shared walls
- Only 2 units (the front neighbor and us)
- We share a driveway with our neighbors and we each have a carport space
- No HOA fees, no budget, no HOA insurance
- Technically, the 2 of us run the "homeowners association"
- Built in 2002, we purchased it in 2009
- We maintain our own properties, both units have yards, porches, etc.\
- There aren't a lot of other detached condos in Berkeley

When we purchased the property in 2009, the appraiser chose only small single-family homes and condos with very small condo complexes. It was appraised again last month but many of the comps the appraiser used were very larger condominium complexes which were in Oakland (not Berkeley).

My mortgage broker agreed that the chosen comps were garbage because detached condos should be compared to other detached condos and/or small SFHs. The bank seemed to agree as well because the audit department got involved. They started the process of getting the appraiser to choose new comps. At the end of the day, the re-finance fell apart because of employment history and the new appraisal was not delivered to me. Since I paid $500 for the appraisal, I feel that out of principle they should see the process through and get the appraisal re-done. This will also help me decide if I should seek out another bank and if I have a good shot at getting a fair appraisal done.

Today, my mortgage broker said that "the appraisal department went back and they decided due to the lack of matching comps, the value cannot be updated." Feels like they are trying to dismiss me and move on.

1) Do you agree with the approach to the appraisal?
2) What options do you think I have? Should I contest the appraisal myself and get explanations for certain decisions? Should I try to go through the bank?

Happy to email the links to the appraisals if you're interested. Thanks so much for the time and assistance!

Sincerely,

Dai

 

[Mike Kennedy]

"At the end of the day, the re-finance fell apart because of employment history"

should seek out another bank

 

[quickly323]

Mike -- I will be seeking out another bank through a different mortgage broker, but I want to first get a sense for whether the next appraisal will come in higher. That's why I want the appraisal re-done correctly if it wasn't done correctly the first time around. If every appraiser is going to take the same approach, then it makes no sense to pay another $500. I would then try to do a streamlined refinance through my existing bank (Wells Fargo).

 

[Michigan CG]

Your first mistake was going through a mortgage broker.

Sounds like you have an appraiser who doesn't understand condo ownership.

If you don't have a valid appraisal that you paid for demand a refund or threaten to take action with the state. Do NOT go to Wells Fargo, they use cheap and quick appraisers who are mostly clueless.

 

[quickly323]

Michigan CG -- Wells Fargo is my existing bank and the rep said that streamlined re-finance would not require an appraisal if I remember correctly.

I want to first determine if I do in fact have a non-valid appraisal.

 

[quickly323]

Michigan CG -- Wells Fargo is my current lender and they offered to do a streamlined refinance that wouldn't require an appraisal, if I remember correctly.

I want to first determine if I have grounds to contest the appraisal. Should I first submit questions directly to the appraiser and get explanations?

 

[quickly323]

Does anyone else have any thoughts?

 

[GCJim]

I can tell you that Wells Fargo has a TERRIBLE reputation for using the 'fastest and cheapest' appraisers. They tend to treat appraisals like they are fast food hamburgers.

 

[KD247]

... I want to first determine if I do in fact have a non-valid appraisal.

The problem is that the appraiser's duties are only to the lender. The lender, in turn, is only required to send you a copy of the appraisal. There is no clear definition of a "non-valid" appraisal, so you're left with a very weak technical argument - that even though your loan is dead, you're still entitled to a complete appraisal and you don't consider the original appraisal to be complete. That argument is worth a couple of phone calls asking for a refund but it might not have the traction to make it through small claims court.

It's extremely unlikely that the appraiser will spend another minute on this job (or even speak with you) "out of principle" unless their feet are held to the fire. I understand your motivation but you might be expecting too much from the revised appraisal. If the appraisal was as bad as you say, the revised version probably won't be any better, particularly with all involved grumbling about having to do an appraisal for a dead loan.

Before you worry about whether you have grounds to contest the appraisal, you ought to find out if there is even a way to contest the appraisal, and if so, what you might hope to gain by contesting the appraisal.

 

[quickly323]

KD -- very helpful, thanks. Is it true that if I ask the appraiser why a certain comp wasn't used or why a certain adjustment wasn't made, he's obligated to give an explanation?