<snip> Thank you for the response to this.
Mr. ApeDavid,
Your welcome
The barn was remodeled into a store with a bathroom, workshop, showroom, and storage area. This was all done with permits. When we closed the store, we converted into a a bedroom, kitchen, bathroom.
I still have issues with your above statement. When the remodeling into a store was done, it was with permits. But then additional remodeling into a living unit is another matter entirely! And you leave out if that was also done with permits granted, and finaled with inspections, by the jurisdictional authority if they were required. Though I am beginning to suspect this may not be the issue. However, I can not tell.
I got 21 pages. I can see where they took sq footages and multiplied out for my house and garage, but when it came to the barn it lists outbuilding $5000.
Interesting you keep calling it a barn. But we do know what you are referring to that way! ..
... At issue is does the appraisal describe
"how" the appraiser came up with $5,000? Because the appraiser made an adjustment for your barn {Let us call it an ADU (accessory dwelling unit) now}. No addendum comments on that I bet! ... I'll go out on a limb and also bet not one single comparable in the report has a similar comp with similar ADU.
Have you asked the appraisers client why the barn is left off? What did they say, and what makes you think they are not lying to you?
This has been drug out for 3 months now. I just finally got a copy of the apraisal out of them last week. Prior to this they would send the wrong one. (it has been appraised before).
Ok, I getting more convinced than ever this mortgage broker has just written you off as someone they cannot obtain a loan for. So they moved on to greener pastures and don't want to waste any time on you. So you're getting s.h.i.t.t.y customer no service. Right?
During this 3 months we had another garage built at a cost of 28,000.
We were assured this would increase the value. The appraiser came out took pictures, was given receipts, and according to the broker $1000 was added to the appraisal.
There you go trusting this broker again. Got a copy of the report from the appraiser? Nevermind, I suspect this appraiser sucks as much as the broker probably does. There is a thing called Scope of Work (SOW), and effective dates in our trade. The stinking appraiser cannot do that without completing an entirely new real estate appraisal. Because that new garage
did not exist at the time of the original appraisal effective date. And I doubt that lame broker paid the appraiser another $200 to $450, or so, for a new appraisal. My guess? The stinking appraiser just looked at the garage and verbally told the broker it would only add $xxxx to the value. All a violation of our standards. Were you charged for another appraisal as a result of that appraisers visit to your property after the garage was built? If you were, demand a copy in writing. If you weren't demand a copy in writing anyway and see what happens. Send your demand certified mail, to get their attention.
I agree with our other esteemed posters here that cost ($28,000) does not always equal value to the market. Often what things cost us to build on land do not return their costs in market value.
BUT! A brand new garage,
IF your property needed an additional garage to meet market expectations, valued at 1/28 the cost is a bit suspect. My bet? Again the broker is lying, or we have one really crappy real estate appraiser who may not only be crappy, but be violating our trades rules. Maybe both! But most brokers do
want to do loans. But then, as far as I may know, you've left out a part of the story that explains things.
I am repeatedly told that values are down in Michigan and that the value cannot exceed receint sales in the area.
I would have to say having a ADU, and a new garage, does not sound like your place would be the most over-improved property in the county. A 24,000 square foot house, when the next largest within 50 miles was only 6,000 square feet, just might break the above rule by a considerable margin. You have other good posts on this. However, I would like to point out to you that the above is not the issue. From the sounds of things, a poorly documented opinion of value by the appraiser is what is at issue here. Unless you just do not understand appraisal reports. But it does not sound that way to me. As most residential appraisers turn out very crappy reports, I am leaning in your favor on this.
From my perspective one would use the comparables and then add the differences in our property to the value. Am I wrong ?
Yeah you are, but no you are not. An appraiser is not supposed to just pull "extra value," for amenities they cannot bracket with similar amenities in the comparable, out of their butts and "add" it in. They are supposed to "extract" the contributory value for such amenities out of the market, make the adjustment, and explain how they pulled that off. For very tough, unusual properties, or very low value items, as a reviewer I might allow for additional leeway over some matter. But your property, an ADU and new garage? Naw! Not
that hard! So on the other hand, just because an appraiser is too stupid, or untrained, to know how to do their job, does not excuse them for just assuming some small adjustment and tossing it in.
So here are the possiblities:
A) You have a good appraisal developed and reported correctly within the general standards of the appraisers' peers for a mortgage assignment. You just don't understand how to read it. "Peers" have to be meeting USPAP (See "C" below) however. We can't say failing USPAP is a "standard" of our peers.
B) Appraisal was developed correctly, the reporting sucks. The appraiser needs to expand on the reporting so it can be understood.
C) Development and reporting are both below the standards of the Uniform Standards of Professional Appraisal Practices (USPAP). This appraiser has issues.
Here is what I am down to. What is this worth to you to pursue? Either find a hardass, like me, to review that appraisers work (and you need a hardass located where you are). I'll give you a hint. Ask the appraiser how many board complaints they have filed and how many of those complaints resulted in the appraisal board taking action against those appraisers in some manner. Versus the board dropping the complaint for lack of merit. If you find one that has a 100% batting average you probably got yourself one very knowledgable appraiser!
Or find a new lender and ask for an appraiser with at least five years of experience. Over ten years would be better. I am sure I just ticked off some appraisers with under five years in, but tough beaners. That's life! I do not recommend just obtaining another appraisal and "comparing" the two. That only causes a p.i.s.s.i.n.g match between appraisals and now the lender doesn't know what to do. Who was right, and who wasn't. Besides, the one you obtained cannot be used for the refinance because you would be that appraisers engaging client. This is not allowed in most situations.
Webbed.
P.S. Again you are welcome. And lucky, as I think I have to start charging for my time for handing out advise.
