Help! VA Appraisal came in $40K less

[shrubberyvaluation]

Ha Ha!

There is a resolution. It appears I will be able to get the house after all! 2 of the borrowers of the other appraisals graciously allowed their reports to be shared with the VA to support my complaint. Ironically, 1 of the 2 appraisals is actually....another VA appraisal that went through the same VA RLC. They were conducted on 10/1 and 10/23.

Comparing those reports for the houses the builder is currently building similar to mine on the same street to the poor appraisal that was done is really eye opening. In the other FHA & VA reports where the sale prices were $274,900 and $269,900 respectively and came in for $290,000 and $280,000 respectively, the appraisers of those reports were through, and I mean thorough. There was detail explanations throughout in the report for every addition, subtraction, adjustment, and even a definition on the current market/trends. They were as long as Tolstoy's War and Peace but written in a way that anybody could understand them and not have to be an expert on the Ocala market.

My report doesn't have that. It was ambiguous and poorly written/explained and comparing the three reports there is simply no way to justify any of the information in mine. Add on top of that that the VA RLC finally called me personally last week and had to admit that they initially put pressure on the VA fee appraiser to revise the report from $237K to $260K so they could refer it back to them and not have to do an ROV, and the fact there is text proof the appraiser appraised the wrong house and tried to cover it up when they came back and took photos of the correct house the next day, and well, it's become one big crapshow that the VA RLC now has to explain to several legislators. Sometime tomorrow I will find out if they will revise the NOV based on the new information in the other appraisal reports, or throw it out entirely and have the appraisal redone. They can't avoid it this time. And then I can get a new contract done.

Thanks again for your support though.

Don't think I was much of a help but grats. When prices were going up fast near me some of my appraisals were coming in over contract price on new construction, most likely because it went under contract months before I did the appraisal. Some were coming in at contract price but would of been under if it weren't for how fast prices rose between the contract date and the appraisal effective date. I'm curious did you see those reports? Did they think prices were increasing or stable?

 

[Hopeful2021Buyer]

Don't think I was much of a help but grats. When prices were going up fast near me some of my appraisals were coming in over contract price on new construction, most likely because it went under contract months before I did the appraisal. Some were coming in at contract price but would of been under if it weren't for how fast prices rose between the contract date and the appraisal effective date. I'm curious did you see those reports? Did they think prices were increasing or stable?

I saw the reports and reviewed everything they had compared to mine.

Both marked the area as Suburban, mine was marked as rural.
Both marked the prices as increasing, mine was marked stable
Both listed the proper well/sewer, mine was marked as well/septic and "hookups not available"

In the FHA report, the appraiser added an addendum and included a total of 6 comps. They specified the timeframe and then allowed the Brianna model I mentioned earlier in this thread as an additional supporting comp and noted adjustments made for the timeframe and slightly larger space. Then they attached a MSA Market report for Ocala that showed prices had increased 20% in the year ending 6/30/2021 and were projected to increase.

Both reports had comps within 60 days that were included in my appeal. They addressed the lot size issue by making the proper adjustment and then indicated as such the neighborhood lot layout and what was usual. One even did a noise adjustment as one of the comps was on a busier street (I mean that was some thorough stuff compared to the "out of price range" printed on mine. They were so thorough that had they come under, they would have been air-tight. The reasoning was solid.

There is still 1 additional appraisal backup we were trying to get for the Philadelphia model under contract for $299,900 but I don't think the got the borrower's permission for that, but looks like it won't be needed.

 

[Cob]

 

[KYLECODY]

Ha Ha!

There is a resolution. It appears I will be able to get the house after all! 2 of the borrowers of the other appraisals graciously allowed their reports to be shared with the VA to support my complaint. Ironically, 1 of the 2 appraisals is actually....another VA appraisal that went through the same VA RLC. They were conducted on 10/1 and 10/23.

Comparing those reports for the houses the builder is currently building similar to mine on the same street to the poor appraisal that was done is really eye opening. In the other FHA & VA reports where the sale prices were $274,900 and $269,900 respectively and came in for $290,000 and $280,000 respectively, the appraisers of those reports were through, and I mean thorough. There was detail explanations throughout in the report for every addition, subtraction, adjustment, and even a definition on the current market/trends. They were as long as Tolstoy's War and Peace but written in a way that anybody could understand them and not have to be an expert on the Ocala market.

My report doesn't have that. It was ambiguous and poorly written/explained and comparing the three reports there is simply no way to justify any of the information in mine. Add on top of that that the VA RLC finally called me personally last week and had to admit that they initially put pressure on the VA fee appraiser to revise the report from $237K to $260K so they could refer it back to them and not have to do an ROV, and the fact there is text proof the appraiser appraised the wrong house and tried to cover it up when they came back and took photos of the correct house the next day, and well, it's become one big crapshow that the VA RLC now has to explain to several legislators. Sometime tomorrow I will find out if they will revise the NOV based on the new information in the other appraisal reports, or throw it out entirely and have the appraisal redone. They can't avoid it this time. And then I can get a new contract done.

Thanks again for your support though.

Hey man!! Congratulations!! I hope it works out for you and makes you happy!

 

[KYLECODY]

Don't think I was much of a help but grats. When prices were going up fast near me some of my appraisals were coming in over contract price on new construction, most likely because it went under contract months before I did the appraisal. Some were coming in at contract price but would of been under if it weren't for how fast prices rose between the contract date and the appraisal effective date. I'm curious did you see those reports? Did they think prices were increasing or stable?

I had many new construction homes here that were coming in roughly 20% higher than the contract price. Contract 400k, my opinion 500k...One year build times and a fast moving market work well in that situation. If people changed their mind on a new home under contract this past year and backed out they were missing out on easy cheese. The builders would love for them to back out if an appraisal/finance issue came up. They could jack the price right up and re-list. I cringed when I reviewed a few appraisals that made no time adjustments on new construction and came in right at contract price.

 

[shrubberyvaluation]

I had many new construction homes here that were coming in roughly 20% higher than the contract price. Contract 400k, my opinion 500k...One year build times and a fast moving market work well in that situation. If people changed their mind on a new home under contract this past year and backed out they were missing out on easy cheese. The builders would love for them to back out if an appraisal/finance issue came up. They could jack the price right up and re-list. I cringed when I reviewed a few appraisals that made no time adjustments on new construction and came in right at contract price.

I wonder if any of them switch to putting them under contract closer to when they are ready for customer selections instead of before being built when they see moves like this. I know one builder near me had a halt for a few months in selling homes because of the uncertainty of material costs for contruction. They still seemed to be building however.

 

[shrubberyvaluation]

I had many new construction homes here that were coming in roughly 20% higher than the contract price. Contract 400k, my opinion 500k...One year build times and a fast moving market work well in that situation. If people changed their mind on a new home under contract this past year and backed out they were missing out on easy cheese. The builders would love for them to back out if an appraisal/finance issue came up. They could jack the price right up and re-list. I cringed when I reviewed a few appraisals that made no time adjustments on new construction and came in right at contract price.

Yea I made time/market condition adjustments on new construction comps that settled within the past month or two that had contract dates significantly further back in time. The resales were selling higher than new construction with similar settled dates...because the resales were under contract closer to a month before. That is why it really poked at me that the comps were 2 from December and 1 from April when the contract dates could be over a year old when a lot of places were seeing appreciating prices.

 

[Alsie35]

I had many new construction homes here that were coming in roughly 20% higher than the contract price. Contract 400k, my opinion 500k...One year build times and a fast moving market work well in that situation. If people changed their mind on a new home under contract this past year and backed out they were missing out on easy cheese. The builders would love for them to back out if an appraisal/finance issue came up. They could jack the price right up and re-list. I cringed when I reviewed a few appraisals that made no time adjustments on new construction and came in right at contract price.

I've brought a lot of new construction appraisals in above contract price in the past year.

*BUT*

There is one thing that you are overlooking: the possibility (likelihood) that those builders priced their homes well ABOVE the market as of their dates of contract many months ago.

In my experience, almost ALL builders do exactly that when the market allows them to get away with it. Once you've considered that little (inconvenient*) factoid, maybe those appraisers coming in at contract price instead of way over it weren't so far off.

*I call it "inconvenient" because I still haven't figured out how to quantify this little "outlier" fact about builders who engage in de facto "printing money" via jacking the contract prices consistently above market during times of strong sales.

Because - and you know this as well as I do - those overpriced new construction homes will be the first ones to start appraising below their last sale price when the market turns.

 

[KYLECODY]

I wonder if any of them switch to putting them under contract closer to when they are ready for customer selections instead of before being built when they see moves like this. I know one builder near me had a halt for a few months in selling homes because of the uncertainty of material costs for contruction. They still seemed to be building however.

Here they limited the number of lot releases each month just due to the materials and labor shortage. They currently aren't building on spec, most of them, and wait until they have a contract to break ground.

 

[Zoe]

OMG, I cannot believe this thread is still alive. Surely, the OP has done something by now.