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Owner Disagrees With Value

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hal380

Thread Starter
Senior Member
Joined
Apr 26, 2003
Professional Status
Certified General Appraiser
State
Connecticut
Here's the scenario;

Refinance, owner's estimate of value $550,000, our final opinion of value $420,000, submitted report, 20 mins later lender calls and says owner disagrees.

Owner claims house is 1796 Sq Ft GLA. Tax card says 1276 and finished basement is 520 Sq Ft. so that is where the 1796 comes from. I have explained to LO all about above ground spaces ect.

LO says owner has 2 recent appraisals which stated 1796 GLA. I told her to send me the reports and I would be happy to review them.

Will review them, and pass on to my Appraisal commish. and then on to Pam.

sorry for the rant, but why do I have to defend myself to some idiot homeowner.

Hal
 

Michael Tipton

Senior Member
Joined
Sep 25, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Here's the scenario;

Refinance, owner's estimate of value $550,000, our final opinion of value $420,000, submitted report, 20 mins later lender calls and says owner disagrees.

Owner claims house is 1796 Sq Ft GLA. Tax card says 1276 and finished basement is 520 Sq Ft. so that is where the 1796 comes from. I have explained to LO all about above ground spaces ect.

LO says owner has 2 recent appraisals which stated 1796 GLA. I told her to send me the reports and I would be happy to review them.

Will review them, and pass on to my Appraisal commish. and then on to Pam.

sorry for the rant, but why do I have to defend myself to some idiot homeowner.

Hal

The homeowner has two "recent" appraisals completed by licensed "professionals" that included below ground sf in the living area.

These "professionals" must have misread the grid page for living area, it does state Above Grade Room Count Gross Living Area. Additionally, isn't there a separate box for Basement & Finished Rooms Below Grade?

You have done all you can by speaking with the lender, contacting your state regulatory board and the AFWL.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Here's the scenario;

Refinance, owner's estimate of value $550,000, our final opinion of value $420,000, submitted report, 20 mins later lender calls and says owner disagrees.

Owner claims house is 1796 Sq Ft GLA. Tax card says 1276 and finished basement is 520 Sq Ft. so that is where the 1796 comes from. I have explained to LO all about above ground spaces ect.

LO says owner has 2 recent appraisals which stated 1796 GLA. I told her to send me the reports and I would be happy to review them.

Will review them, and pass on to my Appraisal commish. and then on to Pam.

sorry for the rant, but why do I have to defend myself to some idiot homeowner.

Hal

The homeowner is not the idiot. The owner has two other reports that say one thing and you say something else. That's legitimate. It would seem very odd that an appraiser in Connecticut wouldn't know to exclude a basement from GLA, let alone two appraisers. Was it a raised ranch, or a walk-out basement? I know that should not matter, but there is something about this basement that made two other appraisers believe it was GLA, as well as at least one tax assessor. Maybe the other two reports were drivebys?

I just say to a lender in a situation like that, "I'd be happy to look at anything they've got, the more data the better", and then try to figure out what is going on.
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
If I may add to Jim K advice. When ever you are challenged by a homeowner use the common man defense and show them why you 'HAD' to do what you did. That is "I feel your pain, but Fannie Mae, ANSI and the NCAB(my board) says I have no choice I must do it this way!"

Get out of the 'Monkey in the Middle' position as quickly as possible.
 

Chris Colston

Elite Member
Joined
Jul 24, 2003
Professional Status
Certified Residential Appraiser
State
Florida
sorry for the rant, but why do I have to defend myself to some idiot homeowner.

Rather the homeowner than a judge.

I could not get the homeowner to understand, so on Feb 5 I'll be getting the judge to help the homeowner understand.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
And don't sweat it too much until you know what's going on.

I've had LOs tell me they had appraisals in hand that contradicted me when in fact they had nothing.

One told me that "four seperate professional appraisers" disagreed with my opinion of value when in fact he had none. It turned out that one of the sources he was citing was myself on a prior appraisal that had no conflict.

Even if another appraiser called below grade area 'above grade', the critical issue is whether your work compared apples to apples (similar building style). If it did, you have credible work.
 

PropertyEconomics

Elite Member
Joined
Jun 19, 2007
Professional Status
Certified General Appraiser
State
New Mexico
The real question is are the comparables the same .... part ground floor and part basement? IF they are .. you could be in an area where the MARKET percieves finished basement space as the same as living area. While this flys in the face of FNMA "guidelines" I dont think it is necessarily wrong "just because".
Too many times we pay attention to the guidelines more than we do what the market is telling us.
I once appraised a 1,500 up and 1,500 basement ... in interviewing the purchaser and those of my comparables NONE of them bought a 1,500 square foot house with a basement ... all of them bought 3,000 square foot homes. I appraised it as a 3,000 square foot home as a result. The finish in the spaces were identical and very nice.
Be very careful and report what the market says and tell that to FNMA. They do accept market conditions that are different than their "guidelines".
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Here's the scenario;
Refinance, owner's estimate of value $550,000, our final opinion of value $420,000, submitted report, 20 mins later lender calls and says owner disagrees...
Hal

During my 30 years working in some area (Realtor; employee of a large national employee relocation company; appraiser) of residential real estate, I have observed the following:

In those instances where a property owner has expressed their own opinion of the market value of their property, that opinion is most often too high!
 

Lobo Fan

Elite Member
Joined
Nov 28, 2004
Professional Status
Certified Residential Appraiser
State
New Mexico
I hear about these previous appraisals all the time, but nobody ever seems to have an actual copy. When asked to see them they become vapor. I agree with PE, split level houses in our area are considered as all GLA even though the lower floors often meet the strict definition of a basement. We play hell trying to find comps that would treat those areas as basement.

Often you can be what I call "dead right". You are right, but are still dead. If you called his house 1700 SF would the $550K be reasonable, or is that number still a stretch?

Just stay pleasant and professional and agree to look at anything they have to cause a reconsideration of value. It may be that the other two appraisals were CMA's or BPO's or drive bys.
 
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