Sales comparison and listing price!

[MrsBee]

Ever since I found out that my next door neighbor actually bought her townhouse cheaper than me (same exact one, we share a wall) I started digging through public records, and my loan documents, as well as the appraisal. When I was buying the sellers agent convinced me in “secrecy” that I am getting the same townhouse for $10,000 less. I know I should have been smarter then, but I wasn’t. I wasn’t as educated, I wasn’t computer savvy, and I believed them all.

Mind you, on my loan documents, two more real estate agents had big interests in selling me the property, and one of them is also a director of the bank who gave me the loan. In my documents it says payment of 40,000 to one of them, and 10,0000 to another. Also, the appraisal was done by the appraisal company owned by the bank, so they all very much know each other.

Here are the facts from my appraisal:
Comp #1
Used listing price and stated date of sale as 3 months prior, and that town home is still on sale today, 3 years later. Same exact town home was sold within 6 months prior to appraisal but for $5,000 less.
Comp#2
Used listing price and stated date of sale as 3 month prior, when in fact that property was sold within 6 months for $1,000 less. Not big of a deal…
Comp #3
Used listing price for the house that my neighbor bought 1 year ago, and stated date of sale as 3 months prior. Actual sales price was $12,000 less than the listing price when it was listed, a year prior.

My question: Is it OK for the appraiser to use only active listings, or past listing for sales comparison approach when there are closed sales available six months prior to appraisal? What to do? Can I go to the bank, and ask for adjustment?

 

[Wendy]

If I was in your situation, I would first seek an independent appraisal from someone YOU choose and trust. The "new" appraisal should be the same effective date as the "old" appraisal.

A good appraiser will be able to quickly tell if the original one was hinky.

 

[Jim Bartley]

Your post is confusing to say the least. If I were you, I would contact an independent appraiser and have the appraisal reviewed.

 

[MrsBee]

Thnk you for your replies, and sorry for the confusion. I guess I overloaded you with all the people involved, when it all comes down to appraisal issue.
To simplify, the appraiser used listing prices from when comps were listed fro sale, and there were actual sales for same exact townhomes available, but those sales are 1,000, 4,000, and 12,000 less than what they were listed.

 

[Stephen J. Vertin MAI]

MrsBee:

Welcome to the forum. While using listing to help value your property is prudent it is not conventional to use listings only. Listing are usually used to support actual sales. What is concerning is the appraiser claiming the properties used in the report as comparables sold when in fact they did not. Of further concern is the indicated prices were incorrect. Any misrepresentation of facts is a "no no" in our business and is considered unethical. The appraiser can get into big trouble for doing so. But keep in mind anyone can make a mistake. With that said, beware that public records are many times contradictory. It comes as no surprise to appraisers but sometimes to the general public. Often data bases are wrong. It is simply the nature of human input. If you had a good appraisers read the Scope of Work. It should tell where the data came from and how it was verified. Make sure you are comparing the data base they claim to be using with the data base you are checking their initial work.

If you find errors report them to the bank. You are not the appraisers client and most likely you will get little help directly. If the bank refuses to have the appraiser correct the issues report the errors to your State Appraisal Board. However, most appraisers will gladly correct an issue if you prove it is incorrect. Always be patient and keep a level head. If you are correct you will prevail.

 

[Boonders]

I have to ask: When will people take personal responsibility for their actions? I mean...you negotiate your sale...the BANK needs an appraisal for lending purposes (you don't apparently think you need your own)...and you want to go back to the seller and say they took advantage of you because you didn't do your own due diligence? If anything i'd be going after the agent that should have been watching out for you.

But anywho...sounds like an extremely odd situation. These also don't seem to be very large $$ amounts either...does it say they used the listing prices? Or you are assuming that? It doesn't say the actual sale price of the sales in the report?

 

[Ariba]

I have to ask: When will people take personal responsibility for their actions? I mean...you negotiate your sale...the BANK needs an appraisal for lending purposes (you don't apparently think you need your own)...and you want to go back to the seller and say they took advantage of you because you didn't do your own due diligence?

How would the opinion of value have changed?

"An appraiser must perform assignments with impartiality, objectivity, and independence, and without accommodation of personal interest"

Listing are generally not used as the first 3 comparables. They could be included as comparable #4..... in order to support the opinion of value.

 

[Boonders]

How would the opinion of value have changed?

I don't understand the question.

 

[Ariba]

I don't understand the question.

You stated:

I have to ask: When will people take personal responsibility for their actions? I mean...you negotiate your sale...the BANK needs an appraisal for lending purposes (you don't apparently think you need your own)...and you want to go back to the seller and say they took advantage of you because you didn't do your own due diligence?

Why would the opinion of value of the subject property be different for the Bank than the Buyer? If the appraisal was developed in accordance with USPAP and Fannie Guideline why would he need his own appraisal? Also, what due diligence should the buyer have done in regard to the appraisal?

How many appraisal have you completed recently on listings alone? I venture to say NONE!

 

[Boonders]

Well, my point is she already negotiated her sale...you don't go to the bank and say, i'd like to buy this house. Tell me how much to pay. Instead, you negotiate your sale and THEN go get your financing which will get you a copy of an appraisal. Your logic is alittle "carriage before the horse" if you think she should somehow negotiate her sale price after getting the bank's appraisal. And the "due diligence" I'm speaking about is researching what price to pay, nothing about the appraisal. Notice she did her research AFTER buying? Not a good way to do it, as she admits herself.

Yeah, none...but how many times have people come on this board and said something that wasn't true about their appraisal? People get easily confused with appraisals it seems. Not their fault at all though. I'm trying to make sure they really USED the listing prices for sales and didn't just state what the listing price of the sales were.

And, i think its a she.