Opinion on Appraisal

[Dan Umstead]

Is the property in Buckhead? Who is the lender?

 

[redfish]

What was the appraiser's license level?

 

[J Grant]

Ask for an ROV (reconsideration of value) and submit any sales you believe are relevant to the lender.

 

[TxArmadillo]

I agree with JG. Take your salient comments in the OP, include your comps (ensure that they are actually comparable to your home), send them to the lender, and request a ROV.

 

[Mark K]

These material errors will cost us our refinancing, and our damages are not insignificant.

ETA - These series of errors in aggregate seem to violate Standards Rule 1-1 (c), which states "a series of errors, in the aggregate, affects the credibility of those results." I really don't want to pursue this route, but our hands are tied right now.

If what you claim in your post is accurate and you end up with a higher rate that costs you a significant amount of $$, personally, my next step would be to see a good attorney. I'd let either the appraiser or his E&O company pay for your future, higher financing costs.

We all make mistakes. Making that number of errors in one report is either laziness or incompetence. Refusing to reconsider them or correct the errors is arrogance.

They have a legal name for people like that; they're called Defendants.

 

[client123]

You have written a very detailed summary of your situation, which I understand and believe you have valid points to be very unsatisfied. I myself, even though I am an appraiser, have experienced some of the same items which you describe. You do have options which are very powerful.

It is obvious that you have evidence of factual errors, which are being ignored by the appraiser. My first suggestion would be to completely clarify in as much detail as possible what happened in each error of the appraisal, and explain why that was wrong and what it should have been. That may be beyond your scope of expertise to fully implement, however you don't have to pin point things to an exact degree, at this point.

Armed with specific information like that, I would have that submitted to the appraiser, along with a very direct statement that his response, or lack thereof, will be turned into the State Board as a formal complaint, which he WILL have to answer to. Trust me, that will be a wake up call and get his attention.

If you still have no progress, or unsatisfactory progress, go to the final step, and file a formal complaint against the State Board that governs appraisers in your area.

I would also inform the lender that they too will be mentioned in the complaint, and may (or may not) be joined as a party to the complaint.

What you are hoping for is a fast and efficient resolution to this matter, which you should have following this course of action. Speaking for myself, I would never let things progress to the state that they are now in - but there may be reasons for that. Perhaps there was a death in the family, or the appraiser himself has suffered something has has prevented him from answering. I try to give people the benefit of the doubt. That has actually happened to me in the past, although not being able to reach me did not result in a problem of any sort - but it certainly could have.

Good luck. I completely understand that this is a serious issue for you, and I hope that my suggestions may help fill in the blanks as to what options you have. You are far from helpless and powerless in this situation. On the contrary, having the state to investigate this on your behalf should be enough, in and of itself, to warrant immediate attention on the part of any appraiser. Their power over appraisers is absolute, and usually somewhat severe.

I do not think you are being unreasonable at all in your requests for explanations, and certainly deserve a professional response to your concerns.

Please keep us posted as to the developments in this situation.

Thank you so much for the thoughtful and lengthy reply. We are feeling very helpless right now. As you know, we cannot speak directly to the appraiser, and we are in the process of moving up the chain at the lender. Of course the Thanksgiving holiday is making it even more difficult to get in touch with people. However, I know that these things take time. We are trying to be patient.

In any event, we put everything together in one concise document and submitted it to our lender. We listed out every factual error for every comp (I forgot to mention that he even listed the sales price of one of the comps incorrectly... truly there are too many errors to list here). We also put together a list of comparable sales in the neighborhood. Each comparable included the sales date, sales price, distance from our home, GLA, bed/bath count, FLMS listing number, and parcel ID. Since he claimed that there were no comparable sales within 1 mile, within 25% GLA, AND within the past 6 months (to be clear, these are separate claims.... so most of the comps are older than 6 months, outside of 1 mile, AND less than 75% of our GLA) , we provided him with a list of over 10 homes that met all of those conditions (sold within the past 6 months, within 25% GLA, and less than 1 mile from our home in his "neighborhood"). The lender then took that information and formatted it for the appraiser to review. I will comment on his response below.

What was the appraiser's license level?

His license says "Certified Residential Real Property Appraiser." Does this answer your question?

Ask for an ROV (reconsideration of value) and submit any sales you believe are relevant to the lender.

We have done this, and we made nearly zero progress. The lender submitted all of the information on our behalf, and the appraiser made one change that increased our value. He updated the number of bathrooms in our home, and he increased our home's value by $10,000 to reflect that change. He also updated the incorrect square footage on comp #2 mentioned in the OP and increased that comp's value by $72,000 ($62K for the square footage mistake and $10K for the bathroom error) to reflect the correct square footage. However, he did not make any adjustment to our home's value for the square footage error. He just changed the value of the comp and left it at that. He did not add the finished square footage in our basement either. He did not address any of the comparable sales that we sent to him, and he left in all of the verbiage about being unable to find homes within 1 mile, within 25% GLA, and within the past 6 months.

After hearing back on our ROV request, the lender basically said the appraisal is what it is. He said that he cannot recall a lender ever changing a value after an initial adjustment (in our case for the missing bathroom... he did not nothing to address the other errors). Please forgive me if my lingo is not correct as I am not an appraiser by trade.

I agree with JG. Take your salient comments in the OP, include your comps (ensure that they are actually comparable to your home), send them to the lender, and request a ROV.

We have done this. One comp sold within the past 3 months, was within 10 sqft of our home (both homes over 5,000 sqft so basically a rounding error), exact same bed/bath, was less than a mile from our home, was within his "neighborhood," and was an open market sale. I cannot even begin to fathom why this comp was not included.

 

[client123]

If what you claim in your post is accurate and you end up with a higher rate that costs you a significant amount of $$, personally, my next step would be to see a good attorney. I'd let either the appraiser or his E&O company pay for your future, higher financing costs.

We all make mistakes. Making that number of errors in one report is either laziness or incompetence. Refusing to reconsider them or correct the errors is arrogance.

They have a legal name for people like that; they're called Defendants.

I so don't want to go down this road. Truly, I don't. All I want is an error-free appraisal that reflects the value of our home. Unfortunately, I am not sure that this particular appraiser is going to be able to do that.

As for the bold, I am just left shaking my head. We gave him a point-by-point list of all of the factual errors. We could not have made his job easier for him if we tried. The facts are what the facts are, and they are easy to independently verify. I cannot even begin to fathom why he did not fix those mistakes. In his defense, he did "fix" the one large square footage error, but he made no adjustment to the subject property to reflect that correction. He also corrected the bed/bathroom count in the subject home. However, did we really need to point out how many bed/baths we have in our home? He both photographed and drew the correct number, but he used the wrong number in our home's valuation. It just went downhill from there.

We still need to talk to the appraisal contact at our lender again. If that doesn't get us anywhere, I think that we will get a second appraisal, which we need to file a formal complaint, and go from there. I will keep all of you updated.

ETA - I think that part of the problem is that if the appraiser corrects all of the factual errors that the new appraised value will be so drastically different than the original value that the integrity of the entire appraisal will be questioned. He has created a complete mess for both himself and us.

 

[client123]

Is the property in Buckhead? Who is the lender?

We are in Brookhaven.... just over a mile from Lenox/Phipps. Do you know the area? If you want the lender, feel free to PM. I am not sure how much personally identifiable information I want in this post.

 

[chad hampton]

I'm not familiar with your market, so it's hard to comment on value. But I do know this - it is not unreasonable to expect an appraisal to be accurate and not error filled.

Reconsideration requests are fairly common. How the appraiser reconciled their value should be well thought out and explained in the report.

The lender/AMC can have the appraiser explain why other sales weren't used, happens all the time.

Best of luck in getting this matter resolved. There is also the possibility that the other few appraisals you had were inflated in some way and this one is actually a better indicator of market value?

However, selecting the most similar comps is the #1 priority. If that isn't correct, then there is a problem.

 

[Mike Kennedy]

In an effort of full discloser, I am not an appraiser. We recently had an appraisal done in conjunction with a refinance on our current home. When we received the appraisal, we extremely surprised by our appraised value. Our home has been appraised several times in the past 3 years, and this particular appraisal was at least $200,000 lower than any of the other appraisals. This has put our refinance in jeopardy.

While I am sure that customers being upset with an appraised value is nothing new, we have serious concerns about the validity of the underlying data. Here are just a few examples of errors contained in the appraisal:
1) Appraiser incorrectly listed the number of bedrooms and bathrooms in subject property. All bedrooms and bathrooms were photographed by appraiser and are above grade.
2) Subject property has approximately 100 square feet of finished basement. Although the appraiser measured this area and photographed it, it is not included in the valuation of subject property. All other properties are given a credit for their finished basement square footage.
3) The appraiser overstated the square footage of one of the comparable homes in the original appraisal by 1,800 square feet. He adjusted the square footage and the value of that comparable by $72,000. However, no adjustment was made to the value of the subject home to reflect this material error. Is it normal to adjust one comparable property due to a factual error and not adjust the subject property as well?
4) Appraiser makes comments such as, "There are no suitable comps within the past 6 months within subject's neighborhood so I was forced to consider sales outside of this time frame." There were at least 10 homes that sold within this time period in the neighborhood (as defined by the appraiser), but the appraiser has refused to consider those and won't give a reason. He still has that language included in the appraisal despite being provided with the numerous examples to the contrary.
5) As in #4, he states that he was unable to find any comparable homes within 25% GLA of subject property so he was forced to consider homes outside of that. One home was 60% GLA of the subject property. Once again, there are homes that meet that criteria in the neighborhood as defined by the appraiser. Appraiser will not comment on why he won't consider those.
6) As with #4/5, the appraiser states that there are no homes within a 1 mile radius so he must expand the search area. There are plenty of comparable sales within the 1 mile radius. Appraiser will not comment on why he will not consider those.
7) Appraiser states that the highest sales value in the "neighborhood" is $849,000, but there have been recent sales of comparable homes as high as $1,600,000. Once again these sales occurred in the neighborhood as defined by the appraiser.

We are not asking the appraiser to pick new comps (we would obviously prefer that he pick comps that are within 25% GLA, less than 1 mile from our home, and the most recent sales... I just think that these are better comps, but in some ways that is neither here nor there), but he refuses to fix the factual errors. We obviously cannot ask for a certain value (I firmly believe that the appraised value is a 20%-30% error... aside from the market conditions in the area, all of our other appraisals have come in our expected range). Any advice from the other side? These material errors will cost us our refinancing, and our damages are not insignificant.

ETA - These series of errors in aggregate seem to violate Standards Rule 1-1 (c), which states "a series of errors, in the aggregate, affects the credibility of those results." I really don't want to pursue this route, but our hands are tied right now.

http://www.grec.state.ga.us/consumer/complaint.html