Confused about my appraisal.pls help understand

[beansb]

My husband and I recently had an appraisal of our home that was ordered by the Mortgage company we have used for years because we are looking to refinance into a lower rate.

We bought our home 14 years ago and have worked to make improvements inside and out using the equity in our home to do. Two years ago our home appraised at $297,000 and we used the equity to build an addition that is 20'X22' and includes a full bath. Now that the improvements are done (nearly $100,000 worth) its time to combine two mortgages into one and thus we had another appraisal done this week. The appraisal came back $12,000 less than it was two years ago. In essence we've not only lost the $12,000 but the amount used to add on over 400sq ft. of additional living space. How discouraging!

What’s really making us feel like we've been kicked is the comps used in appraising our home. Of the 5 comps that were used, three were recent sales, and listed first, and two are currently on the market.

Comp 1: Same size living space
.49 acre of land compared to our 1.84.
No front porch, we have a completely covered front porch

Comp 2: Same size living space
same undesirable electric heat (we have two gas fireplaces alternative heating source)
no basement
No front porch, we have a completely covered front porch
.46 acres of land in a undesirable neighborhood.


Comp 3: Same size living space
same undesirable heating system but without fireplaces
.45 acres of land.
No front porch, we have a completely covered front porch
Note: This house was recently view by a family member looking to buy and was told by the agent that the owners of this house were in default of their payments which probably was a factor in the price the home recently sold for.

Comp 4: Still currently listed for sale.
.99 acre corner lot compared to my 1.84 acres surrounded by state forest land on two sides,
the living space is only 300 sq ft larger
the basement is completely unfinished
Note: this house was also looked at as a possible purchase by a family member who said the kitchen was completely outdated (which was not seen by the appraiser).

Comp 5: Is a house that is 300 sq ft. larger
has a dirt driveway that is shared with two other homes
No front porch, we have a completely covered front porch
the conditions is listed as "average" when compared to my "good" condition.


We feel so insulted by the comparables used. When using comparables that are recently sold shouldn't things like the land size be taken into account? When using comparables that are still on the market shouldn't a house 2 miles away and listed on the market be used before a house that is more than 7 miles away?

Could my appraisal have suffered by a house whose owner sold in a hurry?

How are properties where the land size is a quarter of mine be worth the same or equal when the living space is the same, especially when the location is much less desirable?

How does an appraiser calculate $120 per sq ft. on my house yet all comparables were over $160?

And finally, an appraiser whose location is more than an hour drive was used by the bank. How well could that appraiser have known the location in comparison to one who knows and works this area?

We would appreciate any help you could give us. We are not sure if this is disputable or should we get another appraisal?

 

[Mack McClain]

I don't know anything about your home or the comparables and I don't have enough information to say if they are considered good value indicators for the subject property.
The comparables are only inspected from the exterior. Information about the comparables are obtained from the Local MLS data source, tax records and the realtor.

Site size, topography, location and view should be properly adjusted for in the appraisal. When possible, the appraiser brackets the subject in terms of gross living area, lot size and price. So, the appraiser tries to use at least one comparable that is smaller in size and at least one comparable that is larger and then adjust for the differences. The other features that you say the comparables have that are inferior to your home should have also been adjusted for in the appraisal.

As far as the cost per sq. ft...the cost presented in the appraisal for the comparables also includes the site value. The cost presented in the cost approach to value for the subject is broken down and does not include the site value.

If the appraiser does a lot of work in the area, he knows the market and is competent to work in the area. Just because your home is located an hour from the appraisers office, does not necessarily mean they have no experience in that market area. On the other hand, he or she may have no experience in that area.

You have to remember there is usually not a comparable that matches up exactly with your home. So, the appraiser has to utilize the best available comparables and then make proper adjustments for the differences.

"We feel so insulted by the comparables used. When using comparables that are recently sold shouldn't things like the land size be taken into account? When using comparables that are still on the market shouldn't a house 2 miles away and listed on the market be used before a house that is more than 7 miles away?"

Yes, lot size should be taken into consideration. There should be adjustments for this in the appraisal.

Just because a house is close by, doesn't necessarily mean that it is comparable to your home.

 

[Conservative in Virginia]

I too do not know anything about your home or market area and you did not detail if the homes were in proximity or similar market area BUT I do know that if the appraiser found THREE sales that were recent matching the size in THIS market he may have found the best and the only comps available.

Covered front porch to stoop... not a big deal. I know homeowners who perceive stoops as more appealing as they allow more sunshine into the first floor front rooms. Yes a full covered porch will cost more BUT there are buyers who do not like or want them. The appraiser may have made an adjustment if it is apparant that buyers are willing to pay more for this feature, but not a big one.

Same with the larger lot. Some buyers do not want to deal with the maintenance of the larger lot - some prefer smaller and would NOT pay extra for this feature. The appraiser may have made an adjustment if his data indicates buyers are willing to pay more for a larger lot - if not... NO adjustment.

Appraiser should have made adjustment for finished to unfinished basement.. and/or basement to no basement for same reasons above

Is your value being affected by sellers letting homes go cheap? YUP, that is the market for sure.... Why would I pay even 10K more for your house if I can get one the same size right down the street? I could care less about a dark covered porch and I do NOT want to mow 3/4 acre more grass!!!