Lender Appraisals vs. Independent Appraisals

[VesperLynd]

Generally speaking, are they the same thing?

I ask because I am trying to refinance to get my soon to be ex off the mortgage and to pay him out his share of the equity.

I have suggested we each get our own independent appraisals and compare them and take an average to arrive at a fair value for the home.

He suggests we just go with the lender's appraisal.

Any ideas on whether this could or would work FOR or AGAINST me?

Thanks very much - all input welcome, VL

 

[Randolph Kinney]

If each appraisal is to determine an opinion of market value as defined by Fannie Mae on the same date, in one case for a mortgage finance transaction, and the other case for estate matters, both using the same scope of work, the market value opinions would be approximately the same.

Having a refinance appraisal and two more independent appraisals will not be more accurate than having 3 clocks and knowing precisely what is the time at any moment. There will be a variation.

I would agree with your EX.

 

[The Warrior Monk]

Theoretically, the values should be the same.

However, there are potential issues with lender-ordered appraisals. When appraisals are ordered by attorneys for divorce cases, appraiser competence is likely to matter. When it comes to many lenders, in particular, large national lenders, appraisals often get ordered through management companies. In many of those cases, speed and the most inexpensive fee take precedence over competence.

 

[Tony V]

Theoretically, the values should be the same.

However, there are potential issues with lender-ordered appraisals. When appraisals are ordered by attorneys for divorce cases, appraiser competence is likely to matter. When it comes to many lenders, in particular, large national lenders, appraisals often get ordered through management companies. In many of those cases, speed and the most inexpensive fee take precedence over competence.

I would be paying serious attention to this response...

 

[fifteen]

In divorces the husband and wife usually get their own appraisals. My advice is to get your own - the cost is low and you get to choose the most experienced and qualified from your area. If the lenders appraisal is from an AMC then there's no telling the quality or accuracy of the valuation - especially if it's a dated valuation. Typically, when things are split up, you'd want to know the real value so there's no major imbalance in the setllement. Just my opinion.

 

[Mike Kennedy]

Independent appraisals are not restricted by mortgage lending, and/or a specific Bank's Underwriting Regulations and Guidelines which may skew data, comparables which "fit the Underwriting Criteria" etc. Independent Appraisals by Licensed, Certified, LOCAL, arms-length, experienced Appraisers are governed by the Uniformed Standards of Appraisal Practice and State Law. There can be a WIDE disparity in data, comparable sale selection, and Opinions of Value due to the variances above.

Additionally, Bank Staff Employees ( if the appraisal was done in-house) are generally salary and bonus/commission compensated and performance rated based on how many loans get approved in SOME Banks - not all. Fitting the "mold" is not in your best interest. As David indicated, should that "bank" appraisal have been performed by an AMC contracted Appraiser - that individual may, or may not, have been a Local Appraiser. Suggest scanning through multiple threads on AForum during the past several weeks. A series of articles from AP and multiple newpapers and magazines from across the country have targeted the problems experienced by Lenders and Consumers when "out of market" appraisers are utilized and given 24-72 hours to inspect and deliver an appraisal report. The reported impact has been reported as seriously impacting the results and credibility of those appraisal reports.

IMO, Independent is the way to go. Given the intended use of the appraisal, several hundred dollars well-spent with NO advance $$ estimate communicated by either side to the Appraiser now should result in an actual, Objective and Independent Opinion of Value. Both parties CAN agreed to utilized a Neutral Appraisal - i.e. a single report preferably ordered by BOTH Attorneys. Mediation vs a protracted court battle is also recommended which can also save both parties .......THOUSANDS of dollars. Court should be the Last Option.

my .02.

 

[Wayne Tomlinson]

You have been given good advise above.

Have independent attorney ordered appraisal done.

The lending appraisal business is really messed up in some areas.

Don't take a chance.

Wayne Tomlinson

 

[Carnivore]

Mike,

The independent appraisal is the way to go. I dont believe you will get both attorneys to agree on the single report, althugh I understand your point, I just dont think they will agree. The last one I did the Court ordered the appraisal. The judge would not let the attornies nor their clients get near it.

If your property is of substantial value, then now is not the time to get penny wise and pound foolish. If two reports are going to be used then get the most qualified appraiser you can find. Hopefully your ex will get an idiot.

 

[BRCJR]

............Additionally, Bank Staff Employees ( if the appraisal was done in-house) are generally salary and bonus/commission compensated and performance rated based on how many loans get approved in SOME Banks - not all. ........................

Bank Staff Appraisers cannot be compensated with bonus and/or commission based on loan closings. This is a direct violation of Federal Banking Regulations (Reg Y)

On the other hand a Loan Officer may do an "evaluation" for a loan they are not a party too.

Evaluations are identified as "appraisals" by lenders most times.

 

[Mike Kennedy]

Productivity (volume) as well as quality are key factors in retaining employment and advancement in most Banking Institutions. I do thank BRCJR for providing more accurate info on compensation. I stand corrected. My apologies to the OP.