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Low Appraisal

Tech0515

Thread Starter
Freshman Member
Joined
Jan 31, 2020
Professional Status
General Public
State
New Jersey
Hello All,

So I got my appraisal back and it was lower than expected (I expected it to be low but it came back extensively low).

I have a couple questions on how to proceed.

First I was curious if anyone could tell me if the same VA Appraisal would be used for all banks within a certain period. I applied with several lenders and narrowed it down to 2. The first offered to cover the appraisal at no cost to me so I took them up on this offer. I was wondering if I decided the other lender was a better choice, would the same appraisal be used or would they order a new one (which to me wouldn't make sense).

So a little background. I live in Central New Jersey, and homes similar to mine are selling at about 390K. I was expecting my appraisal to come back a little low (370K) No rhyme or reason just a pessimistic). The appraisal came back at 330K which is only slightly more than what is was a appraised at 3 years ago when I bought it. Please note that my kitchen was updates about 10 years ago. It is the only thing that needs upgrading and I was calculating this as part of the appraisal cost I was expecting)

Below is the information i provided. Everything below has references, websites and statistics to support my information. I was advised that I needed supporting data. However, my questions are what is too much, what makes sense and how do I ensure a fair re-look without pissing off the appraiser. If I have missed anything or you can provide anything additional to add or adjustments, I would be greatly appreciated.

On the rebuttal that I am laying out: (This is a summary and much better worded on the rebuttal)
I pointed out that the appraisal states the homes in my area are selling at a sale to listing ratio of 98% and listed 2 properties similar to mine.
I listed out that he used older properties stating a lack of data within the 1.5 mile range. however by increasing less than a 1/2 mile in the same neighborhood provided more relevant and newer sales.
I listed out that he stated my home needs nothing and he is great shape with a 50 year economical life (Not sure if thats good, however his wording makes me think so).
I listed out that he stated my bathrooms were renovated 7-10 years ago and this is incorrect. 1 was renovated last year and the other one 3-5 years ago.
I also listed out the nearly 100K in work that has been completed since purchase (roof, solar panels, HE Tankless Heat and Hot Water, Central A/C system, bathrooms and cosmetic work)
I then listed the 3 homes that he used, stating that all 3 were 500-700 Sqft less than my home, 1 had wood paneling and from the pictures appeared to need a full renovation and another one didnt have a garage which is a desirable feature in my area. I then listed the sites i used as references.
I also listed out with reference that the average increase in my area for the past 3 years has been 5.85 YoY.
I also listed out that my home is a 5 bedroom, however listed as a 4 bedroom with a den. I advised that the room next to it is identical with 1 exception, the bedroom has a window, and the "den" has an exit out to the back yard. However, both have 2 points of egress (1 from the hallway and 1 to the outside) they both have closets, central A/C, heat and meet the Sqft requirement.
I then provided 3 new comps within a 2 mile range selling within the past 3 months. All 3 are a little smaller than mine and only 1 has 5 bedrooms, however they are closer in size/Sqft and condition.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Are solar panels common? do you own them? Room count is often accounted for by the SF itself. In a market where the difference in 2 and 3 bedroom may be obvious, having more than 4 bedrooms may be inconsequential. The available and adoptive functions of the extra bedrooms remains the same. So I doubt any of us can provide you with much help as we are not there and you are talking judgment nuances. VA appraisers are probably the highest quality appraisers. You can do the Tidewater thingy and or ask for a review.
 

Tech0515

Thread Starter
Freshman Member
Joined
Jan 31, 2020
Professional Status
General Public
State
New Jersey
Are solar panels common? do you own them? Room count is often accounted for by the SF itself. In a market where the difference in 2 and 3 bedroom may be obvious, having more than 4 bedrooms may be inconsequential. The available and adoptive functions of the extra bedrooms remains the same. So I doubt any of us can provide you with much help as we are not there and you are talking judgment nuances. VA appraisers are probably the highest quality appraisers. You can do the Tidewater thingy and or ask for a review.
Yes, the solar panels are owned. They are not common in my town at the moment. I live in a private municipality where the electric rates are high so solar panels are highly saught after. However, until recently they were difficult to get. Fast forward a year and they are slowing becoming more common.

Understood on the bedrooms and Sqft. If there is little difference, it meets all requirements and current being used as a bedroom, why not just list it as a bedroom? Is there some dynamic that changes that listing it this way makes a difference. I have a family room down the hall so no additional space needed.

Thank your for your feedback. I have already asked the bank for a review and will be providing the documentation listed above in the appropriate form. I just want to make sure that if I am going to ask for a review, it is justified and thorough.

Appreciate the support and guidance.
 

Lee in L.A.

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Ask for a reconsideration of value (I hate those).
So, make sure you present relevant info / comps.
Which mostly never happens. And why I hate those, they waste my time.
 

Jerry Bone Jr

Senior Member
Joined
Feb 23, 2004
Professional Status
Licensed Appraiser
State
Oregon
Perhaps you should believe the Appraiser's opinion of value. Perhaps your opinion is too high. Just saying...
 

Privateer

Junior Member
Joined
Apr 8, 2008
Professional Status
Banking/Mortgage Industry
State
California
Hello All,

So I got my appraisal back and it was lower than expected (I expected it to be low but it came back extensively low).
I have a couple questions on how to proceed. . . .
In the attached complaint, an angry Navy officer who was also a lawyer was quite upset when he couldn't get a VA loan due to a "low appraisal." When he couldn't get the VA loan, he applied for an FHA loan -- the appraisal for that loan came back with the "correct number" and he got the FHA loan.

The VA appraiser valued the home at $440,000. The FHA appraiser valued it at $780,000.

Though he got the FHA loan, the Navy officer was still angry about losing out on the better VA loan and sued the VA itself as well as the appraisal firm.

The Navy officer/lawyer lost his claim against the VA, but his claim went forward against the appraiser. It looks like from the docket it might have settled confidentially later. (I had nothing to do with the case.)

Here's a link to the decision on his claim against the VA: https://scholar.google.com/scholar_case?case=2861768414777057061&q=fourte+veteran+loan&hl=en&as_sdt=2006

-- Peter Christensen
 

Attachments

Last edited:

CCAAMO

Senior Member
Joined
Sep 17, 2007
Professional Status
Certified General Appraiser
State
California
Too bad it was in New Jersey and not California
 

ucbruin

Elite Member
Joined
Mar 11, 2014
Professional Status
Certified Residential Appraiser
State
Massachusetts
@Tech0515

"So I got my appraisal back and it was lower than expected (I expected it to be low but it came back extensively low)."

Because the above is a curious statement....
What reason(s) did you have for expecting a low appraised value?

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"In the attached complaint, an angry Navy officer who was also a lawyer was quite upset when he couldn't get a VA loan due to a "low appraisal." When he couldn't get the VA loan, he applied for an FHA loan -- the appraisal for that loan came back with the "correct number" and he got the FHA loan.

The VA appraiser valued the home at $440,000. The FHA appraiser valued it at $780,000.

Though he got the FHA loan, the Navy officer was still angry about losing out on the better VA loan and sued the VA itself as well as the appraisal firm.

The Navy officer/lawyer lost his claim against the VA, but his claim went forward against the appraiser. It looks like from the docket it might have settled confidentially later. (I had nothing to do with the case.)"


The irony will be....
When the market eventually tanks and this guy is underwater....
He'll sue the FHA appraiser....
A win-win or no lose situation for this guy....
Thank you for your service..... :ROFLMAO:
 
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