Help with a Complex Appraisal

[ktuskey]

Hi All,

I need your expert advice. My home is VERY unique. It's a concrete home with an odd configuration. The workmanship is unsurpassed, but it would generally be considered a complex structure.

I had an appraisal about 4 months ago which came in at $420,000. I went to refinance the loan and the new appraisal didn't go through because they said they could not find comps. Rather than do a complex appraisal, the lender recommended that we cancel it as it would be likely the underwriter would reject the finance.

My question is, what options do I have here? If lenders are unwilling to approve a complex structure, is there an alternative route that I can take here? Commercial loan? Keep trying with appraisers until I find one that will do the necessary deep dive? Find lenders that will handle complex structures and if so, what are the lenders that do this?

Any advice would be helpful. I don't want to go down a complex process doing this only to find out that I'm not approved for the refinance.

Thanks for your help.

 

[George Hatch]

Sooo, exactly what is it that's odd about the house?


Generally speaking, atypical styles of construction usually still have comparable utility to conventionally built homes. The impact on value and marketability will usually be limited to design and appeal.

 

[CANative]

You'll need a private loan at a higher interest rate. Or maybe a loan from a small local bank or CU where they know you and the local area better.

It is a complex property (in terms of appraisal) but that's not the problem. The problem is that the improvements are atypical. They don't conform and may be difficult to market and sell (if anything should happen to you repaying the loan.)

 

[Mile High Trout]

Move to ask an appraiser section. (admin)
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Those dang lender agents don't always tell you the whole story. They'll go round and around before referring you to the proper lender who can handle your order.

There are multiple approaches to value, and you don't necessarily need comparable sales to prove value that can facilitate a real property loan.

You should keep on shopping lenders. It is true properties like that are difficult to sell on the secondary loan market, where most originated residential loans get sent to with most lenders.

What they won't tell you is how your note is sold down the line. You're better off focusing on a lender who does not 'sell the note'. Start there simply for consumer safety reasons, and then see if they can offer you what you need. Use lines like; it won't comp out, a unique property, etc, etc. Seek appraisal consultation from a certified general appraiser if you can't make any headway with lenders. Have you shopped around with credit unions, specifically ones who may offer the option to hold the mortgage loan note 'in house'?

Probably another appraiser will post here, and give your more language specific guidance regarding what type of loan you're looking for.

 

[CANative]

Sooo, exactly what is it that's odd about the house?


Generally speaking, atypical styles of construction usually still have comparable utility to conventionally built homes. The impact on value and marketability will usually be limited to design and appeal.

One of the first houses I did as a trainee (with my dad).

It's an all concrete version of a Frank Lloyd Wright design (Falling Waters) located out on the Mendocino coast.

 

[Elliott]

We are just appraisers here, so were only one part of the process. Who is your current financing with? If you can refi with them its probably your best bet. Virtually every lender gets to 'pick' the appraiser and if the lender uses an AMC your only guaranteed is you'll get the least expensive appraiser, so even if you find an appraiser who has the most experience and can handle complex, he/she might not be the one you'll get.

 

[Terrel L. Shields]

it's a concrete home with an odd configuration. The workmanship is unsurpassed

Unique houses have to use unique houses as comps. Without it, there isn't a real way to value a property and consider (either accurately or inaccurately) the loss in value due to the unique character...And it probably suffers a loss in value from just that. In the cookie cutter world we live in, the average appraiser is incompetent to value such a dwelling. And the average underwriter is incompetent to comprehend the nuances of the property and the (good) appraiser's report...because it isn't going to fit that cookie cutter picture secondary market demands.

So my advice would be to seek a semi-small local lender, and obtain financing through a commercial type loan where they can actually choose an appraiser on the basis of expertise rather than turn time and fee.

Yes, that means you won't get a 30 years fixed 3% loan...

 

[George Hatch]

All it takes to get such a home financed under conventional terms with a conventional lender is an appraisal report that makes sense, generally performed by an appraiser who knows what they're doing. I.E, an appraiser who is smarter than the form is.

There are lots of appraisers who could perform an acceptable appraisal on such a property - but you usually won't get such an appraisal at the bargain basement fees that some of these lenders are paying for the appraisals on their "typical" properties. The conventional lenders may have to dig deep into their own resources to find the right appraiser for the assignment; or failing that they might have to go outside their established network and use an outsider.


The best thing the borrower in this case could do for themselves is take a dozen descriptive photos of their home and send those in with their loan application - that way whomever is ordering the appraisal will be able to show their appraisers in advance what the assignment entails. As opposed to the borrower trying to describe the situation to them over the phone when they're making the appointment.

The next best thing the borrower could do for themselves is to hook up with a local broker and identify some listings of other generally comparable homes, regardless of location or current status. A few of those listings - including the ones that didn't sell - will give the appraiser a head start on their research and analyses.

 

[Michigan CG]

.......... I went to refinance the loan and the new appraisal didn't go through because they said they could not find comps. .............

Anything can be appraised. However, not every appraiser can appraise every property. Your lender did not hire a qualified appraiser; it is as simple as that. I have come behind many appraisers who said there are no comps or that it can't be appraised.

If you paid an appraisal fee demand it back.

.........My question is, what options do I have here? If lenders are unwilling to approve a complex structure, is there an alternative route that I can take here? .....

First of all, are you dealing with a mortgage broker who has to use an AMC that hires the cheapest appraiser or are you dealing with a local bank or credit union that has a panel of appraisers that they know? Some banks have a panel of appraisers where one guy is just fine for the non-complex and then there is the guy they use for the complex assignments.

 

[Elliott]

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