Divorce situation - appraisal too high

[soconfused]

I live in Clark County, WA and recently had the house appraised for a divorce. I feel the appraisal came in approx. $10,000-$20,000 too high. My attorney also feels the appraisal is too high.

House Info:
1250 sq. feet
3 bed/2 bath
Built in 1996
Original owner
Air conditioning
2 car garage
One-level...open floor plan
Hardwood floors in kitchen & entryway only
No landscaping other than grass and two trees planted by yours truly
Quiet but slightly shabby neighborhood (not scary...just people who don't have lots of money for landscaping)
House backs to a wetlands area on one side

The house is in good condition but needs some work done in order to sell on the market:
Repair section of fence that blew down
Fix gutter drain (underground piping is clogged and needs to be dug up - it is located under the concrete walkway between the driveway and front door - gutter spout is currently disconnected & has an extender attached)
One bathroom needs new flooring
Living room carpet well-worn
Wall trim dinged and chipped
One window casing needs replacing
Dents in walls repaired
New interior paint throughout
Door on a cabinet in one bathroom won't close due to child sitting on the door while open
One interior door doesn't latch completely
Screens on all windows need replacing

I work in the title insurance industry and because of the slow market, there are lay-offs each month. The home inventory is currently between 14-17 months. Two houses in my neighborhood have been on the market for longer than 3 months.

My appraisal came in at $225,000. A realtor (who has seen the house) told me yesterday that I would be lucky to get $215,000 in today's market. My attorney feels the appraisal is too high because of sq. footage. I believe it is too high due to the slow market, high inventory and repairs needed on the house (especially gutter drain, new carpet and new bathroom floor). The appraiser is a firm that my attorney works with quite often.

My attorney told me to call and talk with the appraiser. I plan to do so on Monday.

1. What is the best way to talk with the appraiser without offending the appraiser? Should I mention that a realtor thinks the appraisal is too high?

2. Should I contact a separate appraiser and get a 2nd appraisal?

Any advice, comments, input is very much appreciated.

 

[Lee Lansford]

When I conduct appaisals for private parties--quite often in situations specific to dissolution of marriage--my written agreement with my client includes words to the effect "The opinion of market value that I communicate is unbiased and cannot consider your personal interest in the property."

That stated, it is best that any information that you might have regarding market data be shared with the appraiser prior to the appraiser's completion of the assignment. Now, if the opposing attorney has any idea whatsoever that the opinion of MV has been "re-visited" by the appraiser that you (I assume you) employed, that attorney will have a field day with your appraiser if your appraiser has to testify in court.

 

[Smokey Bear]

Have you read the entire appraisal? What does it say about the market, the comps etc. Are you familiar with the comparables used? Do you have comps that are more similar, recent or proximate? The appraiser relies on data, not personal opinion. Does the data support his/her opinion?

 

[soconfused]

The appraiser was approved by both attorneys and we are splitting the appraisal fees. In other words, the appraiser was hired by both parties equally. It specifically says that either party may dispute the appraisal if they feel that it is necessary.

When the appraiser came to the house, she said that both attorneys use her firm on a regular basis. She doesn't favor one attorney over the other.

"The opinion of market value that I communicate is unbiased and cannot consider your personal interest in the property."

I didn't intend to give the impression that I expected the appraiser to favor me over my spouse. That is not my goal. I'm not looking to get more than my fair share out of the divorce. I am not a selfish, greedy or vindictive person and only want what is fair to both parties. Also, I did not state if we have agreed to sell the home and split the equity or if one of us will keep the home and buy the other out. If I felt the appraisal was too low, I would still want to question the appraisal.

If I am to stay in the home: I do not want to buy my spouse out for more than MV.
If my spouse is to stay in the home: I do not want my spouse to buy me out for more than MV.
If we are going to sell the home: I do not want the house to be on the market for months on end due to pricing the home too high. We would like to finalize things and move forward as quickly as possible.

That stated, it is best that any information that you might have regarding market data be shared with the appraiser prior to the appraiser's completion of the assignment.

Wouldn't this be interpreted as trying to influence the appraiser's opinion? Shouldn't the appraiser have access to the market data? I thought it would be best to let the appraiser do her job first before I formed an opinion on the appraisal itself. I didn't realize I was expected to provide this information...my mistake. Also, I didn't contact the realtor before the appraisal happened.

Have you read the entire appraisal? What does it say about the market, the comps etc. Are you familiar with the comparables used? Do you have comps that are more similar, recent or proximate? The appraiser relies on data, not personal opinion. Does the data support his/her opinion?

I should receive a copy of the appraisal today in the mail. Closings at work are all refi's and house sales are still very low. The realtor who gave her opinion on my house is the same realtor who has the two houses in my neighborhood on the market that I mentioned earlier; this is why I contacted her specifically. She said that if I told her that I wanted to ask $225,000 for the house, she would advise me to price it at $215,000 and hope for $205,000-$210,000. She also said I would also need to fix the fence/gutter/flooring/etc. to get that price or throw closing costs/some other monetary incentive.

The two houses currently on the market in my neighborhood are both comparable to my house. They both have slightly more sq. footage but the same number of rooms. My lot is slightly larger than both of the houses. She also gave me 3 comps of homes that sold recently; two sold in early January and one sold in November 2007. All three homes were built the same year as my house, within 1/2 mile of my house and very similar. Well, one of the homes has an extra 1/2 bath and an absolutely beautiful yard (could be in a magazine) but other than that...about the same.

Once I have the appraisal, I'll see what comps the appraiser used vs. the realtor.

Thank you both for your input!

 

[Farm Gal]

Hi Confused...

I think the first thing I would do is find out what sales were used and personally contact the agents involved in those sales and ask questions about the condition of those sales, when they sold!! You mentioned contacts, see if they can get the Listing Sheets for the sales used... I might even go knocking on the doors of the houses used as comparables!!! Armed with that information... I might then call the appraiser.

It is terribly difficult to talk to some appraisers - others are much more approachable. I would respond well to a homeowner asking me for explanation and general information, not so well to anything that smacked of 'are you BLIND':Eyecrazy: ? I'd have a list of questions ready based on the analysis you did on the sales... Most appraisers do NOT directly contact sales agents for additional information....

Also, if agents in your area are as hungry as those in other areas, you may be able to get a comparative Market Analysis for free. While free is good, the market is a little nuts and the agent may want your business by setting a 'listing high'. Be honest with the agent - tell them you are in a divorce situation and although not perhaps planning on selling the house at the moment you have a need to know the probable value!

It *may* be in your best interest in terms of time money and hassle-factor to just get a second appraisal opinion :icon_idea:. If the two are highly disparate, then it may be worth your while to get a third... but now you are starting to get out there on all three counts!

Sadly appraisers are getting beat up six ways from Sunday on value opinions at the moment and many are even more touchy than usual about someone questioning their opinion of value.

On the other hand if you are going to have to split $10,000 dollars ...or as you stated as much as $20K that you honestly feel is 'too high' ... a small amount of personal time and effort or a second opinion is in order!

Good luck!

 

[Mike Kennedy]

SC, couple of questions......

1. who ordered the appraisal - you or your attorney OR "the other side" if so who the attorney or your soon-2-be ex...?

2. your post states a couple of assumptions - but does not state whether you have a copy of the appraisal??

3. the deferred maintenance items you cite - were they noted in the report? if so, does the Overall Condition of the house stated in the report jive with the deferred maintenance items - or does it appear to be over-stated?

4. conjecture of your attorney - you - or the real estate agent may or may not well-founded on Review of the Report.


prior to making a recommendation, pls address the above. thanks.

 

[soconfused]

Sadly appraisers are getting beat up six ways from Sunday on value opinions at the moment and many are even more touchy than usual about someone questioning their opinion of value.

This is exactly why I wanted to know the best way to talk to the appraiser. A majority of closings are being held up at work because so many lenders are challenging the appraisals...sometimes for up to two or three weeks.

I had a feeling that appraisers may be extra sensitve these days when challenged.

Thank you for your input. I want to remain as neutral as possible when I call the appraiser on Monday.

 

[soconfused]

Smokey - Just noticed your avatar. I don't work for FATCO. :new_smile-l:

 

[Lee Lansford]

OK, then...both parties to the divorce hired the appraiser.

My guess is that in each and every situation where this occurs, one party walks away happier than the other.

Also, I suspect that you intend to remain in the house and the "high" opinon of market value increases the amount of dollars that you have to pay to your spouse.

Lacking significant error or some other deficiency in the appraisal, the next step might be court and having your attorney question the appraiser about his or her opinion.

I can only speak for myself, but I know that when I have communicated an appraisal that will be used in divorce proceedings, I am then ready to testify in court. At that point--unless something really NEW comes along that absolutely indicates that I must adjust my opinion--it is highly doubtful that I will be changing what I have already offered.

 

[Tim The Enchanter]

Do you have comps that are more similar, recent or proximate?

I think Smokey hit the salient point.