Second Appraisals

[brad126]

A couple questions I'm hoping the experts could help with:

When doing a second appraisal, does the second appraiser know what the first appraisal came in at?

Why does it seem that second appraisals always come in lower than the first?

If a second appraisal is ordered a whole month and a half after the first in a "declining market", is it almost certain that the second appraisal will come in lower or below contract?

 

[Randolph Kinney]

I have had second appraisal orders for FHA. My second appraisal was a 2055 and was $40,000 under the purchase price. The lender ordered a full 1004 two weeks later. It still came in $20,000 lower than the purchase price.

Time makes a big difference in a declining market.

Because this was a purchase, I suspect the first appraisal hit the target value, the purchase price.

It's like a game of liar's poker; the first guy is assumed to be lying. The second guy can call the hand, lets see if the loan goes through.

The loan did close, at my appraised value.

 

[RSW]

I've done both the first and second appraisal. The reason I know is, when I went out to do my CIR the borrowers would say the other appraiser didn't require that to be repaired.

 

[Riick]

Anyone working on a driveby that doesn't end up toward the lower end of the range
is probably asking for trouble.
Those FHA people not as dumb as they look <lol, kidding>;
2nd appraisal as a driveby is IMHO asking for a more conservative number.

 

[brad126]

Anyone working on a driveby that doesn't end up toward the lower end of the range
is probably asking for trouble.
Those FHA people not as dumb as they look <lol, kidding>;
2nd appraisal as a driveby is IMHO asking for a more conservative number.

This was a full 1004 as a second. It's a townhouse if that means anything.

Rule still aply about it coming in lower, or could it very well come in at contract?

 

[TJSum]

Actually as appraisers, we really shouldn't know the results of the other appraisal if everyone follows proper procedures. But some lenders will try to send the first report when the second is ordered which would defeat the purpose of having two independent appraisals done. So who's to know which one comes in higher.

My question might be, who orders the first appraisal and who orders the second? It could be the first appraisal is ordered by the loan officer who sends it to his "favorite" appraiser and then the second one is ordered by a different party. ???

 

[brad126]

Actually as appraisers, we really shouldn't know the results of the other appraisal if everyone follows proper procedures. But some lenders will try to send the first report when the second is ordered which would defeat the purpose of having two independent appraisals done. So who's to know which one comes in higher.

My question might be, who orders the first appraisal and who orders the second? It could be the first appraisal is ordered by the loan officer who sends it to his "favorite" appraiser and then the second one is ordered by a different party. ???

Well in this case bother were ordered from the loan officer, or underwriter I should say. I doubt there is a "favorite", because the mortgage company is out of state.

 

[TJSum]

Well in this case bother were ordered from the loan officer, or underwriter I should say. I doubt there is a "favorite", because the mortgage company is out of state.

Out of state doesn't mean anything when a loan officer picks the appraiser, many pre-screen appraisers with value checks prior to assignment of the order.

Just guessing on why the second could be different, as an appraiser this news is new to me as when I complete them I never know the results of the first.

 

[Riick]

All the 2nd FHA appraisals I've done have been to initiate reverse mortgages,
they've all been 2055 drivebys, and, I've never gotten as much as page 1 of the URAR from 1st appraisal.
and, so far, every d*mm one of them has never been listed in local MLS system.

Keep 'em the in the dark, and feed 'em mushroom food - seems to be the motto.

 

[Ron Runyon]

This was a full 1004 as a second. It's a townhouse if that means anything.

Rule still aply about it coming in lower, or could it very well come in at contract?

there is no rule about an appraisal coming in lower....complete the market research, use the appropriate comparables, adjust properly and let the data speak for itself