warez
Freshman Member
- Joined
- Sep 8, 2025
- Professional Status
- Banking/Mortgage Industry
- State
- Connecticut
Hello everyone,
Happy New Years. I'm hoping to get some professional perspective on a situation I'm navigating with my parents. I'm their son, and I've been trying to help them through what has become a complicated foreclosure situation, partly to take the stress off them, and partly because I want to make sure we're not missing something obvious before we proceed.
I understand this forum is for general informational purposes about appraisals and not legal advice. We are represented by legal counsel. I'm simply hoping practicing appraisers can help me understand whether some things I've observed are normal industry practice or genuinely unusual.
Background (keeping details general for privacy):
This involves a high-value waterfront property in an affluent northeastern town. We're at the stage of a "foreclosure by sale" proceeding, where the court determines fair market value, what's owed, and how long the property should be marketed before any public auction. For those unfamiliar, this differs from a "strict foreclosure" (where the lender takes title directly after a law day) or a "short sale" (where the property is sold for less than the debt owed with lender approval). In a foreclosure by sale, the property goes to public auction, and any proceeds above the debt go to the homeowner, so getting the value and marketing time right matters enormously.
Our goal is straightforward: sell the property, through a private sale before the court-determined sale/auction date. We had an offer at asking, but just fell through in contract phase. We're working earnestly toward that. But given the property's price point, waterfront location, and the inherent complexities (elevation certificates, wetlands considerations, zoning restrictions), the buyer pool is limited. Based on CMA data from a reputable brokerage and my own research, properties in this immediate area have averaged approximately 300 days on market over the last five years, with over 60% taking longer than 90 days to sell.
Foreclosures by Sale are typically a 3-4 month process. Once the foreclosure-by-sale process reaches its late stages, a sign goes up roughly six weeks before the public auction date. This complicates matters significantly because it steers away end-user buyers, undermines value perception, and attracts lowball investor offers. So getting adequate marketing time established before that happens is very helpful. The state I am in is home-owner friendly, and its very important to the courts that home-owners are able to capture the equity in their home if there is equity (fortunately, there is.)
The Appraisal Situation - Where I'm Looking for a Sanity Check:
We've now seen several appraisals conducted over the past year, and there are some things that strike me as unusual. I'd appreciate your professional opinions on whether these are red flags or simply how things work.
1. A Significant Value Drop in About Five Months, With No Explanation
Unbeknownst to us until recently - the lender obtained an appraisal in early spring 2025 ("Spring Appraisal") that came in at approximately $12 million. Then, roughly five months later, a different appraiser completed an appraisal in early fall ("Fall Appraisal") at $9.5 million, a drop of nearly $2.5 million, or about 20%.
Both appraisals indicated "stable" market conditions. The Spring Appraisal's market addendum actually showed median comparable sale prices increasing. There's been no material deterioration to the property. If anything, we've made improvements to ensure it shows well and has no surprise issues for buyers. Yet the Fall Appraisal, the lower one, is the valuation being presented to the court as fair market value.
2. Two Appraisals Disclosed on the Same Day
Both the Spring Appraisal ($12M) and the Fall Appraisal ($9.5M) were uploaded to the court docket on the same day in late fall 2025, even though they were completed more than five months apart. In this state's foreclosure proceedings, appraisals cannot be older than 120 days. I understand there may be procedural reasons for this, but the timing struck me as curious. It's not in the bank's interest to have high FMV. But they provided an appraisal (possibly by accident, or maybe to get ahead of not disclosing it originally - I have no idea.)
3. "Client-Assigned" Exposure Time Language
The Fall Appraisal contains this statement in the USPAP Compliance Addendum:
"Assignment conditions call for a value based on a 90-120 day exposure time... At the request of the client, the subject's exposure statement per assignment conditions is following: The subject's exposure time, if priced within a reasonable range of the appraised value would be within 90-120 days."
This stood out to me. My understanding, and please correct me if I'm wrong, is that exposure time is supposed to be the appraiser's independent opinion based on market data, not something the client assigns. The actual market data shows properties in this area average around 300 days on market, not 90-120 days. Is language like "at the request of the client" and "per assignment conditions" typical, or does it suggest something I should be concerned about?
4. Same Appraiser, Same Property, Three Times in Three Years
The Fall Appraiser disclosed in their report that they had appraised this same property three times in the last three years for the same lender. Those earlier appraisals were never submitted to the court, only this most recent, lower one was. (Which, on a side note: untangling what the lender may have charged us for, for multiple appraisals that we haven't seen is a whole other can of worms.) I've read that repeated engagements by the same client on the same property aren't necessarily a USPAP violation (and its appropriate and adheres to standards to disclose those facts), but can create concerns about independence. I'm curious what practicing appraisers think about this pattern with a lender as client. To be clear, I'm not casting judgment. I genuinely don't know if this is standard practice or something unusual.
5. Exterior-Only Inspections When Interior Access Was Available
Both the Spring and Fall Appraisals used exterior-only ("drive-by") inspection methodology. However, a different appraisal conducted in summer 2025 we commissioned, held interior access during that same period. The property has waterfront features and amenities that would seem to warrant interior inspection for a property at this price point. Is it common to use exterior-only methodology when interior access is readily available?
If interested, I can cite the relevant guidance or standards as it relates to USPAP for the issues above, but don't want to distract too much by getting technical on matters above my paygrade.
6. Maybe some concerns about the comps selected in the most recent appraisal. I'm no expert.
My ask to you all:
I've consulted way too much AI to help me organize my thoughts and research But AI has a habit of telling you what you want to hear, or at least what it thinks you want to hear. So I'm coming to you all, the professionals who do this work every day, for an old-fashioned human to human gut-check.
I'm not looking for legal advice or trying to bash anyone's reputation or impugn integrity. I'm just trying to navigate a stressful situation and make sure we understand what's normal versus what might warrant further scrutiny.
If you've read this far, thank you. I was so nervous to write this hah. Any insight, perspective, or even a "you're overthinking this" would be genuinely appreciated. If you have questions, I am more than happy to get into certain specifics as best I can. Thanks.
Respectfully,
Guy
Happy New Years. I'm hoping to get some professional perspective on a situation I'm navigating with my parents. I'm their son, and I've been trying to help them through what has become a complicated foreclosure situation, partly to take the stress off them, and partly because I want to make sure we're not missing something obvious before we proceed.
I understand this forum is for general informational purposes about appraisals and not legal advice. We are represented by legal counsel. I'm simply hoping practicing appraisers can help me understand whether some things I've observed are normal industry practice or genuinely unusual.
Background (keeping details general for privacy):
This involves a high-value waterfront property in an affluent northeastern town. We're at the stage of a "foreclosure by sale" proceeding, where the court determines fair market value, what's owed, and how long the property should be marketed before any public auction. For those unfamiliar, this differs from a "strict foreclosure" (where the lender takes title directly after a law day) or a "short sale" (where the property is sold for less than the debt owed with lender approval). In a foreclosure by sale, the property goes to public auction, and any proceeds above the debt go to the homeowner, so getting the value and marketing time right matters enormously.
Our goal is straightforward: sell the property, through a private sale before the court-determined sale/auction date. We had an offer at asking, but just fell through in contract phase. We're working earnestly toward that. But given the property's price point, waterfront location, and the inherent complexities (elevation certificates, wetlands considerations, zoning restrictions), the buyer pool is limited. Based on CMA data from a reputable brokerage and my own research, properties in this immediate area have averaged approximately 300 days on market over the last five years, with over 60% taking longer than 90 days to sell.
Foreclosures by Sale are typically a 3-4 month process. Once the foreclosure-by-sale process reaches its late stages, a sign goes up roughly six weeks before the public auction date. This complicates matters significantly because it steers away end-user buyers, undermines value perception, and attracts lowball investor offers. So getting adequate marketing time established before that happens is very helpful. The state I am in is home-owner friendly, and its very important to the courts that home-owners are able to capture the equity in their home if there is equity (fortunately, there is.)
The Appraisal Situation - Where I'm Looking for a Sanity Check:
We've now seen several appraisals conducted over the past year, and there are some things that strike me as unusual. I'd appreciate your professional opinions on whether these are red flags or simply how things work.
1. A Significant Value Drop in About Five Months, With No Explanation
Unbeknownst to us until recently - the lender obtained an appraisal in early spring 2025 ("Spring Appraisal") that came in at approximately $12 million. Then, roughly five months later, a different appraiser completed an appraisal in early fall ("Fall Appraisal") at $9.5 million, a drop of nearly $2.5 million, or about 20%.
Both appraisals indicated "stable" market conditions. The Spring Appraisal's market addendum actually showed median comparable sale prices increasing. There's been no material deterioration to the property. If anything, we've made improvements to ensure it shows well and has no surprise issues for buyers. Yet the Fall Appraisal, the lower one, is the valuation being presented to the court as fair market value.
2. Two Appraisals Disclosed on the Same Day
Both the Spring Appraisal ($12M) and the Fall Appraisal ($9.5M) were uploaded to the court docket on the same day in late fall 2025, even though they were completed more than five months apart. In this state's foreclosure proceedings, appraisals cannot be older than 120 days. I understand there may be procedural reasons for this, but the timing struck me as curious. It's not in the bank's interest to have high FMV. But they provided an appraisal (possibly by accident, or maybe to get ahead of not disclosing it originally - I have no idea.)
3. "Client-Assigned" Exposure Time Language
The Fall Appraisal contains this statement in the USPAP Compliance Addendum:
"Assignment conditions call for a value based on a 90-120 day exposure time... At the request of the client, the subject's exposure statement per assignment conditions is following: The subject's exposure time, if priced within a reasonable range of the appraised value would be within 90-120 days."
This stood out to me. My understanding, and please correct me if I'm wrong, is that exposure time is supposed to be the appraiser's independent opinion based on market data, not something the client assigns. The actual market data shows properties in this area average around 300 days on market, not 90-120 days. Is language like "at the request of the client" and "per assignment conditions" typical, or does it suggest something I should be concerned about?
4. Same Appraiser, Same Property, Three Times in Three Years
The Fall Appraiser disclosed in their report that they had appraised this same property three times in the last three years for the same lender. Those earlier appraisals were never submitted to the court, only this most recent, lower one was. (Which, on a side note: untangling what the lender may have charged us for, for multiple appraisals that we haven't seen is a whole other can of worms.) I've read that repeated engagements by the same client on the same property aren't necessarily a USPAP violation (and its appropriate and adheres to standards to disclose those facts), but can create concerns about independence. I'm curious what practicing appraisers think about this pattern with a lender as client. To be clear, I'm not casting judgment. I genuinely don't know if this is standard practice or something unusual.
5. Exterior-Only Inspections When Interior Access Was Available
Both the Spring and Fall Appraisals used exterior-only ("drive-by") inspection methodology. However, a different appraisal conducted in summer 2025 we commissioned, held interior access during that same period. The property has waterfront features and amenities that would seem to warrant interior inspection for a property at this price point. Is it common to use exterior-only methodology when interior access is readily available?
If interested, I can cite the relevant guidance or standards as it relates to USPAP for the issues above, but don't want to distract too much by getting technical on matters above my paygrade.
6. Maybe some concerns about the comps selected in the most recent appraisal. I'm no expert.
My ask to you all:
I've consulted way too much AI to help me organize my thoughts and research But AI has a habit of telling you what you want to hear, or at least what it thinks you want to hear. So I'm coming to you all, the professionals who do this work every day, for an old-fashioned human to human gut-check.
I'm not looking for legal advice or trying to bash anyone's reputation or impugn integrity. I'm just trying to navigate a stressful situation and make sure we understand what's normal versus what might warrant further scrutiny.
If you've read this far, thank you. I was so nervous to write this hah. Any insight, perspective, or even a "you're overthinking this" would be genuinely appreciated. If you have questions, I am more than happy to get into certain specifics as best I can. Thanks.
Respectfully,
Guy
