desktop appraisal WAY LOWER than field apprasial?

[sotwell]

Hi - I am looking for a little help from some experts. I have a 2 year home that I had custom built outside Charlotte NC. 2 weeks ago I refinanced through a broker with AmTrust. I had a full appraisal done and received a value of $540 which I thought was a good number. I spent about $480-$500K having the home built. I refied my mortgage for $417.

I have been speaking with a bank about a HELOC (AmTrust no longer does HELOCs). Our credit score is 803. Well I heard from the bank today and their desktop appraisal came in at $400K! I was floored. The bank is suggesting having another full appraisal which I would have to pay for at $325.

I thought that it may come in lower than my earlier appraisal of $540, but I was still expecting the low $500s. Now I am concerned that another full appraisal may come in way low, and the first one was just really high, though AmTrust did not accept the initial appraisal and made the first appraiser go get more comps.

Are desktop appraisals usually this far off?

 

[panappr]

Hi - I am looking for a little help from some experts. I have a 2 year home that I had custom built outside Charlotte NC. 2 weeks ago I refinanced through a broker with AmTrust. I had a full appraisal done and received a value of $540 which I thought was a good number. I spent about $480-$500K having the home built. I refied my mortgage for $417.

I have been speaking with a bank about a HELOC (AmTrust no longer does HELOCs). Our credit score is 803. Well I heard from the bank today and their desktop appraisal came in at $400K! I was floored. The bank is suggesting having another full appraisal which I would have to pay for at $325.

I thought that it may come in lower than my earlier appraisal of $540, but I was still expecting the low $500s. Now I am concerned that another full appraisal may come in way low, and the first one was just really high, though AmTrust did not accept the initial appraisal and made the first appraiser go get more comps.

Are desktop appraisals usually this far off?

For what its worth most banks are trying to call in the HELOCS right now, if your bank is Chase expect it.... I just had $150,000 reduced to $10,000 and an AVM decided the value $200,000 below market. They suggested that I could get my own appraisal, but only through their AMC. What kind of logic is that. The problem is you just can't go any where else and get another HELOC right now, it's like trying to get a first mortgage at 95% LTV, aint going to happen.

I think the BIG BOX Banks are earning a lot of distrust right now.

 

[The Warrior Monk]

Are desktop appraisals usually this far off?

They can be...and much more.

These appraisals can work well with homogeneity...say in large developments of similar homes. If the properties are dissimilar, or value is dependent on factors that affect value not easily discovered while performing a desktop appraisal (quality, condition, various locational issues, etc.), then the desktop appraisal may be completely useless.

 

[sotwell]

The bank is RBC and they are willing to do 90% LTV. I've stay away from the big box banks.

This is by no means a track home. Custom built in a small cutom neighborhood. One of a kind from custom architectural drawings.

Any reason why a second field appraisal from RBC would be much different from the one at AMTrust? I would hate to pay $325 and not get somewhat close to the orginial.

 

[Ron Runyon]

It is quite common for desktop appraisals to be way off...I suggest paying for a full appraisal. I understand you have fears that the appraisal may come in lower than you would like, however, having that knowledge will help you make better financial decisions going forward. I would be really hesitant to run up a HELOC in this market based on a desktop appraisal anyways...I have seen them off in the other direction as well...which could be disasterous for you financially if you try to sell your home a few years down the road. Find a good appraiser and see what your home is truly worth....the $325 appraisal fee is a small price to pay when making a financial decision of this magnitude. Good Luck.

 

[DTB]

It is quite common for desktop appraisals to be way off...I suggest paying for a full appraisal. I understand you have fears that the appraisal may come in lower than you would like, however, having that knowledge will help you make better financial decisions going forward. I would be really hesitant to run up a HELOC in this market based on a desktop appraisal anyways...I have seen them off in the other direction as well...which could be disasterous for you financially if you try to sell your home a few years down the road. Find a good appraiser and see what your home is truly worth....the $325 appraisal fee is a small price to pay when making a financial decision of this magnitude. Good Luck.

I love to listen to homeowners go on and on about custom this architect that and try to cheap out on a $300 item. Really rich.

Think about it, your "cost" to build 2 years ago really doesn't have much to do with what it's worth today, does sit? Get that number out of your mind.

Skip the HELOC or you will be under water. Soon.

 

[The Warrior Monk]

The bank is RBC and they are willing to do 90% LTV. I've stay away from the big box banks.

Am I reading the post right?...90% LTV is an awfully high LTV when the collateral is being valued via a desktop appraisal.

This is by no means a track home. Custom built in a small cutom neighborhood. One of a kind from custom architectural drawings.

Any reason why a second field appraisal from RBC would be much different from the one at AMTrust? I would hate to pay $325 and not get somewhat close to the orginial.

If you really want an appraiser that specializes in the appraisal of properties improved with custom and/or unique homes, expect to pay much more than $325.

 

[SutnNC]

Somewhere along the line, the appraisal has been thought of as a "formality." The above statement speaks volumes and does not pull any punches;

I love to listen to homeowners go on and on about custom this architect that and try to cheap out on a $300 item. Really rich.

Your best move at this point would be to go on the internet and find an appraiser with a local office that has been in business for at least 10 years (had some exposure). It is very much worth the money and really just a drop in the bucket when trying to account for your paper and liquid assets. Having somebody else select an appraiser for you (and others) is not working but is, unfortunately, the current status quo for now and moving forward (for how long, who knows?). These days when paying an AMC (appraisal management company) for an appraiser you will most likely not be getting anything near what you pay for fee wise.

Good luck and don't think about the .0008% investment (compared to your stated or expected value) cost to obtain a very valuable observation/analysis of your home and the surrounding market area. If you read through one without looking at the "estimated value as of" part only, there is some useful information in there.

Oh, I almost forgot; Desktops are often not the best indicator and I don't do them for that reason. I can't imagine that I could be nearly as credible from my "desktop" than getting my hands dirty. One of the biggest observations without knowing an area or not having visited an area for a while is neighborhood appeal, specific to the subject property. Especially when dealing with custom homes.

Anyway, good luck and I hope you find your answer.

 

[JRS at OBX]

RBC is going to send out a Fiserv appraiser anyway, so expect to get the cheapest appraiser in Charlotte, not that the cost savings will be passed down to you.

 

[Ariba]

The bank is suggesting having another full appraisal which I would have to pay for at $325.

WOW! $325 appraisal for a $500,000 loan. Seems like a no brainer to me.