Thank you for all your feedback ... some answers and some scant updates I've gotten ...
1. the "$190" comparable had an adjusted value at the bottom of the Grid of _________?
$193.5k after a couple of adjustments. I talked to my mortgage broker last night and she tells me the two active comps in the appraisal were not used in the calculation of the sales comparison approach value of our house, but rather are included to support that the neighborhood we're in supports houses of the value we're buying. Don't the closed comps do that? She said the $190k was just a 'typo' and had no impact on the calculation of the value of our house because of that. Supposedly she's going to try and get a supervisor from the appraisal organization to call me. In all honesty, I feel for appraisers, I read a post online about an appraiser commenting on how many hours it would take to do an appraisal correctly, and quite honestly it seems like it should cost more than the $400 or so I paid. That being said, I still expect a professional and accurate report and I just don't think I received that.
2. if the "$190" comp was used as an "adjusted value" benchmarket i.e. the remaining comparable sale or list prices were adjusted DOWNWARD toward the $190 range - THAT itself would exhibit a MAJOR problem.
After adjustments the other four ranged from $419k to $590k. The $190k was an obvious error that should never had made it past a basic quality control check.
If the "190" comp's Net Adjusted Sale Value was in close proximity to the range of the other comparable adjusted values - this would indicate a typographical error at the top of the Grid for that Comparable.
And ultimately this is what they are claiming that it is a typo, which is a ridiculous typo to have in my opinion.
Re "the 2100sf Finished Basement":
"In the case of one comp it has over 1,100 less finished square feet and 700 less total square feet, but no adjustment was made. In another case the comp had 800 less finished square feet and 1,700 less total square feet and there is no bedroom in the basement, and again, no adjustment was made."
The market, by lack of any comparables with 2100sf (or more) finished basements may clearly indicate Functional Obsolescence, Superadequacy (Over-improvement) above the largest, similarly finished comparable.
Alternatively, depending on the client required "Turn-around Time" for the assignment, the appraiser may not have done the requisite due diligence in support of an opinion that the subject's basement is atypically large, and atypically finished yielding no additional return on investment in the current market.
Should the required market data research have been done, the search parameters and the results - including addressing the subject's finished basement - should appear in both the Cost Approach and Sales Comparison Approach to Value.
Those are fair points, the builder had estimated the finished basement at 1,500 sf at one point, so I was kind of surprised when the appraiser estimated it at 2,000 sf ... it's a lot of space for a big family room, a bedroom, and a bathroom, no doubt, and I can see an argument where maybe you'll have difficulty finding someone willing to pay more for a 1,300 sf family room compared to an 800 sf family room.
Per Dodd-Frank you can request that factual errors be corrected.
Are you saying that some appraisers needed a law passed a few years ago to compel them to fix factual errors in reports?
I would think a professional appraiser would have to do some serious explaining as to why comparables selling for around $430k and around 3500sf are being adjusted by only $18/sf. I have seen such adjustments (and lower) being valid for poorer urban areas but when talking about $430k properties I would question how many acres the property is on (as in 20ac or 40ac+?) or whether or not it is on the ocean or lake or such. For my markets those three are typically the only way the adjustment would be so low (ave condition in a poor neighborhood, or poor condition but with significant acreage or site features).
The property does have one, what we believe, is a significant site feature, it's a golf course view home, which is duly noted in the appraisal. None of the comparables are, but no adjustment is made for this to any of the comparables, so in effect the appraiser says it does not add any value over homes without this feature. I don't particularly agree with that either, but it was not something I mentioned previously because it's lower on my list of many concerns I have about the report.
Diminished marginal return.
There is generally a huge difference in the functional utility of a 2BR house compared to a 1BR house, a difference between a 3BR and a 2BR, but as BR count rises the question of functional utility can shift to how roomy the various rooms are in comparison to each other (are the bedrooms smaller such that a double-bed is a tight fit? Is the kitchen reduced in size? Does one have a den and the other an extra bedroom?) and at some point having one extra bedroom may add nothing or actually be a slight negative.
That does make some sense, which is why I was less sure that was a problem and was more just a question if that was appropriate. FYI, they did adjust for the one comp that had one less bathroom, the difference was $1,500. (again, what seems to me to be a low adjustment, but something that was lower on my list of concerns).
Honestly? Except for full walk-out basements I have found neighborhoods where, if the property is under 20yrs old, having a finished basement or not added *NO* value whatsoever (aka, those without finished basements did not sell for less than those with finished basements as the houses were new enough new owners wanted to finish them to their own standards or just use for storage.
It's a full walkout basement (and it has golf course views actually). I believe in our area it adds value, and actually the appraiser acknowledged it had value over an unfinished basement, but did not acknowledge large differences in the size of the basements (and maybe as someone pointed out earlier, that is appropriate because it's over-finished or such).
