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Is It Me Or Is It Him?

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Trvlngyrl

Freshman Member
Joined
Apr 13, 2017
Professional Status
General Public
State
South Carolina
I would love some advice on how to proceed. We are refinacing to take advaantage of the low interest rates and hope to get a HELOC in the next 60 days. The appraisal came in 100k lower than I expected. The low appraisal does not affect the refi, but will put a dent in my HELOC. I called a realtor who is familliar with my home and neighborhood and asked for comps. I was presented with comps closer in size, more recent in sale date and higher in price . I do not want to be one of those homewoners living on fantasy island thinking that they have a million dollar home and it is only worth 50 cents. Winter Park Florida 4/2.5 at 2920 sq ft. The 3 main comps that were used varied from 400 to 900 sq ft. smaller, and are currently on realtor.com so I took a peek to compare amenities. All 3 are flips that show very well. Summer kitchen with granite, tongue and groove coverd porch with pergola attached (living and dining area) , brazillian hardwood flooring throughout, wooden garage door, tile roof, fencing around property is a brick wall, built ins in all bedroom closets, millwork around all windows. Those are the amenties of my home which the others don't have. His appraisal of 470k comes in at 160sq ft. His lowest comp is 175 sq ft. Am I looking at this all wrong?
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
His appraisal of 470k comes in at 160sq ft. His lowest comp is 175 sq ft. Am I looking at this all wrong?

Using the $/sf based on the sale price (dividing the sale price by the size-of-the-home) is not the best method for evaluating an appraisal. The $/sf you reference includes all elements in a property. An appraisal (for a HELOC) breaks down those elements into significant components and makes adjustments on a line-item basis (as a rule). So, I wouldn't get hung up on $160 vs. $175/sf.

Where it sounds like you are looking correctly is the comparables that your Realtor friend provided. Based on what you have stated, it sounds like you have some reasonable questions.

There is a formal process called a "Request for Reconsideration". Your loan officer/agent should know how it works, but in general, this process provides a stakeholder with a method of going back to the lender and asking the appraisal to reconsider its original analysis. You have data (sales comparables) which you believe are better indicators of value than those included in the original report. This is what I recommend you do:
1. Provide those sales to your lender.
2. Write a short summary of why you think those sales are better indicators of value than the ones used in the original report.
3. Ask the lender to review your request and then see if they think there is legitimacy in your questions. If they do, they will pass it on to the appraiser. If they don't, they should tell you why that is the case.

4. If the lender believes the data warrants a comment by the appraiser, the lender will send the data to the appraiser and ask him/her to take a look at it and determine if they result in a change in the analysis (the "reconsideration").
5. If the appraiser reviews the data and determines a change is warranted, the appraiser should incorporate the data and make the changes.
6. If the appraiser, upon review, concludes that no change is warranted, the appraiser should let the lender know that is the result and, ideally, give the lender some reason why that is the case. For example, let's just say that all the sales your Realtor friend pulled were in a different school district and that school district had a premium associated with it and all the sales used in the original report were from the same school district as your home, so the appraisal used those same-district sales. You get the picture.

Unfortunately, some appraisers are reluctant to reconsider their original value conclusion; there is a history behind this which I won't get into, but it is a fact. Some believe if they make a change it is an admission of an error (and, they would be in error). Any of us can miss data, and if given the opportunity to evaluate better data than what was originally used, we should take that opportunity and incorporate it into our analysis.

Some things are black and white. I mis-measure your house by 500sf; you provide documentation that shows the correct measurements. That is a factual error that I should correct.
Some things are not so black and white. You think the sales 2-blocks away to the north are better than the sales I chose 2 blocks away to the south. That could be opinion and I may determine there is no change warranted.

So, contact your loan agent/officer and outline the issue as you see it. Ask about the Reconsideration Process. He or she should be able to help you go from there.

Good luck!
 

RSW

Elite Member
Joined
Feb 18, 2002
Professional Status
Certified Residential Appraiser
State
Tennessee
Wouldn't the properties on Realtor .com be active listings and not closed sales? You need to provide closed sales.
 

Trvlngyrl

Freshman Member
Joined
Apr 13, 2017
Professional Status
General Public
State
South Carolina
RSW, they are closed sales, however all listing information including detailed photos of the properties are on Realtor.com
 

Trvlngyrl

Freshman Member
Joined
Apr 13, 2017
Professional Status
General Public
State
South Carolina
Denise, thank you so much for such a detailed response. It was so much more than I expected. Your explanation has me pointed in the right direction. I contacted the lender and she did indeed send me a Request for Consideration. Out of curiosity, should active listings that are not pending be used as comps? My appraisal included two such listings.
 

nstanbru

Senior Member
Joined
Feb 19, 2009
Professional Status
Certified General Appraiser
State
California
Out of curiosity, should active listings that are not pending be used as comps? My appraisal included two such listings.

The listings may have been included due to a lender specific requirement. There is really no way to know if they will sell, when they will sell or what the final sale price would be. My advice would be to include closed sales. Follow points #1, #2 and #3 that Denis posted, especially #2.
 

Trvlngyrl

Freshman Member
Joined
Apr 13, 2017
Professional Status
General Public
State
South Carolina
Update. After submitting all documents the lender sought a comment from the appraiser. He did not adjust the appraisal amount. For reasons unknown the lender saw fit to give us a 250 credit for the appraisal. Thanks to all that provided input and prospective.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
I would love some advice on how to proceed. We are refinacing to take advaantage of the low interest rates and hope to get a HELOC in the next 60 days.

Uhmmmmmmmm,

Update. After submitting all documents the lender sought a comment from the appraiser. He did not adjust the appraisal amount. For reasons unknown the lender saw fit to give us a 250 credit for the appraisal. Thanks to all that provided input and prospective.

Did you get a full real estate appraisal or an "evaluation'?

On the appraisal report, at the bottom of the forum with the information about the client, subject property and neighborhood, in the lower most right hand corner does it say,

Fannie Mae Form 1004 March 2005

????

or something else?

.
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
lender saw fit to give us a 250 credit for the appraisal
Did you get a full real estate appraisal or an "evaluation'?
I wouldn't doubt the lender's 250 credit is the amount that was paid to the appraiser through an AMC
The OP mentions Winter Park, FL. I wouldn't doubt an AMC was involved.
 
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