New home appraisal low during refinancing - please help me

[expensiveduck]

I bought a NEW home in GA during April 2012 for 400K. When I tried to refinance it now, the appraised value is now down to 360K as per the new appraisal report. There were no key factors/reasons indicated in the report on why the value was 40K down within in last six months. Also it was indicated in the report that appraiser did not see any factors like (market conditions, house condition) affecting the house value to go down…he is not sure why the value has gone down. He used all non-basement sold at rock-bottom price as comparable with an adj of $17K. And porch also, the adj. made is $600.
Please help me on the following items...

• I know a few NEW SIMILAR homes sold at the same time for 400K but those homes were not used for comparison. I am not if that is because the total square feet data of these NEW homes are not available public. Is there any way, I can use those recent sales as comparable? I am not able to see those data on the county website too. Is there any other option to use these recent sales as comparable?
• Where do we get the total square feet of the NEW homes very recent sales (NEW homes sold after April 2012)? My understanding is that homes sold after April 2012 data (square feet) is not available public. Is that correct?
• Is there any specific reason why appraiser did not use the most recent NEW home sales (NEW homes sold after April 2012) in the same subdivision for comparison?

Please advice.

 

[Mike Kennedy]

Where is the property located? Which Governing Municipality?

 

[Walter Kirk]

I can't answer your qusetion about why the square footage of certain sales is not avaliable in the public record. I can however tell you how I and many other appraisers determined square footage before public records were made avaliable on the internet.

1) contact the seller
2) check for square footage in sales listings.
3) go to the comparables and measure them

You may also want to check with the building inspector as the blueprints may be on file.

If you know of comparable sales I suggest that you submit them to the lender or appraiser.
It seems that someone may have taken a shortcut and failed to check other sources of property information however it is possible that builders may have inflated the values of recent new construction sales.

 

[J Grant]

E.D., please understand that none of us can opine a home we haven't seen , so all help is of a general nature. From your post, it is impossible to tell if the value went "down" from 400k to 360k, or if you over paid (from a MVO standpoint) when you purchased new. If so, question the first appraisal, not this new one.

One of the appraisals is a better MVO, but so many factors to into that any of us are guessing. Of course, most owners think a higher value is "better", but that is not what the lender is looking for. The lender is the client, not the homeowner, even though you the homeowner pay for the appraisal.

It is a complex subject how much of a MVO should be based on other new home sales, and how much based on resales or recently sold homes that are almost new. Nobody here can say what is going on in your community. You can submit the new home sales you know of to the lender and let them sort it out as to how many sf they are, and if they consider them good comps or not.

If you can refi at the 360k value, go with that, but try to submit other comps and see what happens. You can ask a realtor or call or stop in the new home sales office to find out sfootage.

 

[Jo Ann Meyer Stratton]

Not all sales of new homes can be used as comparables. If the new home was offered on the open market either listed in MLS or on a builder's website or a sales office in the subdivision it could be a bonafide sale. If the new home was constructed to the owner's specification and was not exposed to the open market it is not a viable sale. That situation is called a "created sale" or land / home package. Open market sales from April, 2012 would likely be too old of sale to be used as comparisons. It all depends on how active your market is; if there has been lots of market exposed sales in recent months, those should be used in the appraisal report. If your specific market has slowed down and nothing or very few sales have occurred since then, an older sale might be usable. The opinion of market value in the report should reflect the market as of today, not 6-12 months ago. I suggest to contact a local experienced, knowledgeable appraiserl and pay for a field review of the current appraisal report. If he/she agrees with the opinion of market value then you can be assured that as of today that is the value of your property. Market values can changed over time, that is why most lenders will only accept appraisals that have been prepared in the past four months, and the closer to today's date the better.

 

[Webbed Feet]

I bought a NEW home in GA during April 2012 for 400K. When I tried to refinance it now, the appraised value is now down to 360K as per the new appraisal report. There were no key factors/reasons indicated in the report on why the value was 40K down within in last six months.

Perhaps you should go back to the April 2012 appraiser and ask them to provide you key factors and reasons why the value was 40K UP six months ago.

Also it was indicated in the report that appraiser did not see any factors like (market conditions, house condition) affecting the house value to go down…

Who says the value went down? Perhaps it was never $400K in the first place!

he is not sure why the value has gone down.

He doesn't have to be sure, I bet he never said it went down and never said it was ever $400K in the first place.

He used all non-basement sold at rock-bottom price as comparable with an adj of $17K. And porch also, the adj. made is $600.

Your above sentence doesn't make any sense at all reading it.

Please help me on the following items...

• I know a few NEW SIMILAR homes sold at the same time for 400K but those homes were not used for comparison. I am not if that is because the total square feet data of these NEW homes are not available public. Is there any way, I can use those recent sales as comparable? I am not able to see those data on the county website too. Is there any other option to use these recent sales as comparable?
• Where do we get the total square feet of the NEW homes very recent sales (NEW homes sold after April 2012)? My understanding is that homes sold after April 2012 data (square feet) is not available public. Is that correct?
• Is there any specific reason why appraiser did not use the most recent NEW home sales (NEW homes sold after April 2012) in the same subdivision for comparison?

Please advice.

1) No you cannot use them as comparable because you're not the appraiser. The appraiser has to opt to use them.

2) What is or is not publicly available, or when it is or is not, differs all over the country and on many factors. There is no one standard answer other than until your local assessors office updates their records on those it will not be public.

3) You need to have your lender ask the appraiser. One reason might be that a builder contract to build a house on land that has been sold separately to a buyer is not a market indicator of the value of your property.

 

[Webbed Feet]

E.D., please understand that none of us can opine a home we haven't seen , so all help is of a general nature. From your post, it is impossible to tell if the value went "down" from 400k to 360k, or if you over paid (from a MVO standpoint) when you purchased new. If so, question the first appraisal, not this new one.

<....snip......>

Now dog gone it J. Don't you know the high appraised value is ALWAYS the correct value and anything lower than that is crap? Shame on you!

 

[Robert Dunkle]

One other problem with new houses is that, around here, new house sales prices are $15-40,000 more than resales because the builder is "padding" the sales prices with concessions and "upgrades" to keep the "apparent" sales prices up in the additions. Should not be used as comps without knowing the true sales price.

 

[Tim The Enchanter]

.....try to submit other comps and see what happens. You can ask a realtor or call or stop in the new home sales office to find out sfootage.

Yes. And talk to your loan rep about how to do that, there should be a procedure. Good luck.

 

[Delta85]

You'll need to provide comparables that support the value YOU believe the home to be and those comparables should be better than the ones chosen by the appraiser. But first you need to know HOW to choose a comparable and what constitutes a good comparable. It's not as easy as you think and you need to do this WITHOUT cherry picking based on sales price. You may be surprised where you end up.