New Issue - Appraisal Came in Way Too High - Temecula, CA

[Webbed Feet]

I'm not so sure you did a professional job in this case, however. Is it not a violation of NAR's Standards of Practice to submit an offer you knew to be significantly over market, especially one that you knew your buyer was not willing to pay? Misrepresentation of value can't apply only to the listing agent and not the buyer's agent, in my opinion.

So far, it has been my understanding AKGolfer IS the buyer and not a real estate agent or broker.

 

[John Farnsworth]

Wow this is good stuff. Want to play some poker. My cards and I will deal! Sorry just a joke!

 

[akgolfer]

clarification

I'm not so sure you did a professional job in this case, however. Is it not a violation of NAR's Standards of Practice to submit an offer you knew to be significantly over market, especially one that you knew your buyer was not willing to pay? Misrepresentation of value can't apply only to the listing agent and not the buyer's agent, in my opinion.

I left out some words when I said I'm a professional, as I'm a professional in another field (professional civil (PE) and traffic engineer (PTOE)) and just meant that I do my best job and if I make an error, I fix it and modify my recommendations accordingly.

I'm the actual buyer and yes I came up with the idea (not my realtor's) of making an offer that stated in the ammendment that we agreed to the appraiser value and then gave ranges for how much closing cost the seller would pay for us depending on the appraiser value. It seemed like a good idea at the time, now it may back fire. I'm not sure if this is legal, but I assume my realtor would have told me if it wasn't.

I just hope the second appraisal comes in lower.

 

[Ian Valenzuela]

So far, it has been my understanding AKGolfer IS the buyer and not a real estate agent or broker.

Excuse me, I stand corrected.

 

[Webbed Feet]

First Thanks Tel2002 & Webbed Feet(Private message) for your quick response!

Based on your comments I believe I need to list below the appeal questions and responses and ask what should be my responses back (if any)

So here are the appeal points and exact quote responses:

1) Why were all other properties eliminated exept #1, #2, #3 (i.e. in that they have nothing in common with subject property other than size and general area) - Response: "the purpsose of an appraisal is to use verifiable data combined with experience and expertise to arrive at an opinion of data. (?) The appraiser used, what she determined was the most appropriate comparables. She did not eliminate all other data, she just weighted comps 1, 2, and 3 most heavily, which is appropriate appraisal practice"

Huh? Either you, AKGolfer, accidentially mistyped what this appraiser responded with and there are typos, or this appraiser needs to try reading what they type before sending it to anyone! Other than that, I really get sick of appraisers communicating in the third person all the time. I think it is a horrible habit and just silly.

Let's tear this apart. Me thinks the "purpose" was to express an opinion of market value. The requirements, or what appraisers call the Scope of Work, is to use verifiable data. This appraiser fails to justify WHY she weighed comps 1, 2, and 3 the most heavily apparently both in her original report (if she had of you'd know why, you don't) and in this response. If I am correct, then both would not be in compliance with Standard Two of USPAP and neither would be "appropriate appraisal practice."

2) The three comparables (1,2,3) are not in the same sector and warrant an adjustment - Response: "It is common and accepted appraisal practice to use comparables from similar and competing neighborhoods, and unless they are gated communities the appraiser does not feel an adjustment is warranted"

I hear the song "Feelings" in the background. If it were me, at this point, I might respond with .. "If you don't answer better than that, I may soon "Feel" like filing a state board complaint over this. So far I don't "Feel" that way, so you had better justify that far better than with your "Feelings. Please detail EXACTLY how a project with those amenities and HOA dues equals "similar" or "competing" either one." Appraisers are to be unbaised, they sign certifications to that affect. Later responding about their "Feelings" tends to tick me off. A biased person has feelings over such matters. An unbaised appraiser should have market data, developed opinions, and supported conclusions.

3) Comps have fully mature landscaped yards and warrant an adjustment - Response "The subject has been seeded and re-seeded, and has a 6-zone sprinkler system. Plus there is no market data to indicate an adjustment is warranted"

I might respond with: "To avoid a board complaint, I suggest you provide in detail your market study you performed BEFORE signing this real estate appraisal that supports your contention that there is no market data. Because what you are saying is there is no data that indicates an adjustment is NOT warrented either. Frankly, I don't believe you've ever made such a market study and I do believe you have absolutely nothing to back up that statement, and did not have when you signed this appraisal report. I base that view on your prior statement regarding your 'Feelings." Frankly, the point the dirt was "seeded and re-seeded" just isn't very meaningful at all.

4) Comps 1 and 2 have great view, which warrant an adjustment - Response "The appraiser lives in very close proximity to the subject and comps, she does not know of an extraordinary view for comps 1 and 2. We also used satellite photos, aerial photos, and street level photos and could not determine that comps 1 and 2 had superior views to the subject or other comparables"

I warned you, views are very subjective. However, where the appraiser lives is completely beside the point. I'd love to see her show me how anyone determines anything regarding views from satellite and aerial photos. If in marketing these properties the views were photographed and placed on the local MLS by the broker / agents, I think you have material to bonk her with. But that will not mean that she has to agree about the views.. Subjective again in most cases. Besides, if she lives so darn close, what in the heck does she need satellite and aerial photos for? Drive over there!!!! Again, unless you can prove such a vast difference in views that 50 people would all agree with you, I'd move on past this one.

5) Comp 3, you assume, has more desirable upgrades - Response "This would be an opinion, and we cannot argue opinions with the appraiser, as they are licensed by the state to give their opinion"

This answer does not seem to be from the appraiser. Who is it from? I do not agree upgrades are opinions. Vinyl floornig loses to hard wood flooring, that is a fact. What a comp sale has regarding upgrades are facts, not opinions. As appraisers we are not supposed to be making wild *** guesses regarding facts. This comment about can't argue over an opinion because appraisers are licensed by the state to give opinions is not only stupid, it is not correct. Last I checked I am a real estate appraiser, not a real estate opinionator. Yes, and appraisal is an opinion. But the above regarding upgrades is out of context.

6) Why was the condition of Comp 2 given a $10,000 credit for condition? - Response "Again this is an opinion, as stated before we cannot argue opinions with the appraiser"

Again, who is replying? Yes, the condition adjustment is an opinion. The REASON for the condition adjustment never should be an opinion! You asked "why," you did not ask how come precisely $10,000. The original report should have explained "why" the condition adjustment was made, and not just some vague statement about it.

7)5 other comparables have been included to help justify that appropriate adjustments were not made. - Response: "Adjustments are based on market data and appraiser experience. Your adjustment amounts are your opinion, and we cannot argue opinions...As to the 5 alternative sales presented, the appraiser has indicated that they all come from the same area as the comparables in the report. #4 sold for considerably less than all other sales. It is considered a statistical outlies, just as if it was on the extreme high end, it would not be used. #5 is not more recent than comps 1,2, or 3 and once adjusted would further support the opinion of value. (Why?) #6 is shouwn to be in average condition. #6 is also bank owned wihich means it sold at a liquidation value not market value. (Hold up here. Just because a property was owned by a bank at the time of sale does NOT prove it was sold at "liquidation value." This is a wild *** assumption being made and no evidence is being offered to prove otherwise in this statement.) Once property adjusted, this would further support the opinion of value. (Ok, so adjust it and prove it) #7 is a bank owned property and sold for liquidation value. (again, proven how?) Once properly adjusted this would further support the opinion of value ("Once"....so was it adjusted or not?)....Based on the data provided, there is no reconsideration of value warranted."


So that was the responses. Any comments are welcome.

Thanks,
AKGOLFER

I "feel" that mostly you got back a bunch of vague statements. The bank owned issues may or may not be cause to not use those sales as comps. IF bank foreclosed properties are setting the market there, then those sales should have been used. "Liqudation" value or not.

 

[DaniG]

Hey Dani,

Your email link does not work (it says you don't accept emails), so feel free to send me one. As for the AMC, my credit card says "Street Links" and my lender is First California Funding. Since you are in Temecula, how much would you charge me for a desk review or whatever the right words our? I'm an analyzer, so I already have a spreadsheet with the 3 comparables in the report and an additional 5 that are just as good or better, but all 8 seem to come out in the same ballpark (actually the 3 the report included are in the middle) when appropriete adjustments are made. Most the comparable are from Central Park community in Murrieta.

Sorry for the late response. I sent you an e-mail. I don't like to do reviews. I don't feel my opinion is better or worse than any other appraiser. I will see what I can do to help if you try e-mailing me again. I would like to see the license # for the appraiser, that will tell you how long they have been appraising as well. If there are Factual Errors, or USPAP issues, those should be reported to the state as well as the AMC who ordered the appraisal. This is the only way we can fight these AMC's. They give the work to the cheapest appraiser. You get what you paty for. I'll bet the appraiser received less than half of the fee you paid.
When this started, I did some work for an AMC. We were not supposed to discuss fees with the homeowners. I asked everyone how much they paid. I had to know. It was at least 50% more than I was getting. I don't work for AMC's anymore.

 

[akgolfer]

Thanks Webbed Feet! Excellent words!

Hello Webbed Feet,

Your responses were EXCELLENT! Do you mind if I almost copy them word for word?

I may be sending you a check in the mail:new_smile-l: and am very thankful for the time you have taken to respond to me!

Thanks again to all of you for your help (still waiting on the 2nd appraisal as it got sent back by a different automated system's internal QC program, so hopefully that is a good sign).

AKGOLFER

 

[Webbed Feet]

Hello Webbed Feet,

Your responses were EXCELLENT! Do you mind if I almost copy them word for word?

I may be sending you a check in the mail:new_smile-l: and am very thankful for the time you have taken to respond to me!

Thanks again to all of you for your help (still waiting on the 2nd appraisal as it got sent back by a different automated system's internal QC program, so hopefully that is a good sign).

AKGOLFER

LOL.... you might want to patch up the typos....