Discrepancy

[dani3as]

There are multiple factors that could cause what you are calling a discrepancy. Appraisals are opinions. Different appraiser have different opinons. Market values change over time. Sometimes they change very quickly. Although appraisals are opinions, they have to be supported. A big part of that support comes from the proximate and recent sales that are found during the appraiser's market research. The appraiser does not make those sales... he or she finds them and compares them to the subject property. What is available to be found can change over time. Both the more recent and previous appraisal reflect the appraisers' opinions of the value of the property as of the effective date of the appraisal.

I totally understand that. The discrepancy is the location of the comps used were not that same.

 

[Alsie35]

The first appraisal my lender had done before purchase in May 2023 $345k. I purchased the property and rehabbed it. Now I am trying to refinance and the current appraisal was done Nov 2023 $250k.

To answer your question, given that presumably the market in the area did not "crater" between the time of the two appraisals, ONE of these two appraisals is likely significantly off from market value, almost certainly because that appraiser did not use the most similar comparable sales, and may have ventured into a neighboring market area with different appeal/influences. Call it an "educated guess". At this point I would be asking the lender to get another appraisal (which lenders will often do if there appears to be a problem).

 

[CGinMN]

Maybe more to it than that. The first appraisal might have been done subject to the rehab, and the rehab was ultimately not as high-end as what the original appraiser assumed it would be.

Nobody will be able to tell you what the discrepancy is unless you post pics of your rehab, along with specs, along with address of the comps from each appraisal. I wouldn't be demanding a second appraisal until I fully understood both, which I doubt you do given the line of questioning that brought you here. No offense.

 

[Dublin ohio]

The first appraisal my lender had done before purchase in May 2023 $345k. I purchased the property and rehabbed it. Now I am trying to refinance and the current appraisal was done Nov 2023 $250k.

What was your purchase price. there should be an analysis of your previous purchase price within the second appraisal and typically an explanation of any difference

 

[dani3as]

Maybe more to it than that. The first appraisal might have been done subject to the rehab, and the rehab was ultimately not as high-end as what the original appraiser assumed it would be.

Nobody will be able to tell you what the discrepancy is unless you post pics of your rehab, along with specs, along with address of the comps from each appraisal. I wouldn't be demanding a second appraisal until I fully understood both, which I doubt you do given the line of questioning that brought you here. No offense.

Thank you. That makes sense.

 

[dani3as]

What was your purchase price. there should be an analysis of your previous purchase price within the second appraisal and typically an explanation of any difference

Purchase price was $132k, rehab $90k.

 

[Terrel L. Shields]

Purchase price was $132k, rehab $90k.

And they thought it was then worth $345k? That does sound like #1 was inflated.

 

[Elliott]

Purchase price was $132k, rehab $90k.

Ding, Ding, Ding. We have a winner!

 

[Fernando]

Was prior purchase listed in MLS? Sales not exposed to market usually not arms length and has details which we are not aware of.

 

[Surf Cat]

There's a couple pieces of the puzzle missing here....The OP has to give a better description of what transpired without leaving pertinent details out.