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Ticked off Purchaser

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liznindy

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
Here we go again....Buyer is ticked off because current appraisal was about 20% lower than appraisal shown to them (by seller) at time of sale.

Buyer is calling me (current appraiser) and is wondering why. ...."How can the home lose value in one year?"

It is difficult explaining the appraisal process to the general public who tend to believe appraisals to be the sum of all components instead of what the market will pay.

I politely asked her, in the course of our conversation, "Why would the seller sell the home for $80,000 less than what it was appraised for (last appraisal)? Probably should have kept my mouth shut :wink:

Home was not on the market (no Realtor or FSBO sign)...
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
Liz, just went through a similar thing. From now I am refusing to discuss it with the home owner. They can address the lender. My Mantra is "your not my client. I can not discuss it with you." Then my answer to their obvious statement that they payed for the appraisal is "I don't write the rules, I just work by them." I am not going waste time debating with emotional home owners anymore. PERIOD!!
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Liz,

I haven't had too many purchase appraisals lately, but I know that it won't be long before I'll be running into more situations like yours.

When a growing number of MLS descriptions that the listing agents write include statements such as, "A bargain! $20,000 under last appraisal!", well....the writing is on the wall.

I'm with Jeff, the less said the better off you'll be. It's too difficult to explain the appraisal process and sometimes the harder you try the deeper you dig yourself into trouble.
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
After this long in the business I've learned never to answer the phone when a borrower calls. If I'd had more positive feedback I wouldn't have taken this evasive action.

I let my client know the borrower's been calling. If the client complains to the broker I put together a well crafted letter and blow-apart the objections of the uneducated complaintant. This is not to say I think that borrower's are stupid...just that it isn't my job to educate them for free. They're only going to argue anyway--they want the loan, that's all there is to it, and they're gonna jump up and down until they get it.

-Mike
 

Dave Doering

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Missouri
My usual tact on situations where my current appraisal is being compared to a previous appraisal is to state that I can not speak for the accuracy or cirmunstances of the prior appraisal without seeing it. A number of times the alleged "higher" appraisal never materializes.

It if there is a higher appraisal, it is possible that the perameters of the prior appraisal may be different from those of the current opinion of value. For example, the site size might be different or the value may have included certain improvements, or non-realty items that are not appropriate for the current assignment.

However, in most cases what I have found is the prior appraisal was overvalued by an appraiser trying to make someone happy for a refi or to validate their over-opinion of the value of their property.

If I were the current borrower/purchaser, I would be very grateful to have a well supported appraisal that reflect the value of the property I was buying rather than one that merely confirms the sales price. Afterall, if the property is overvalued, it is there equity (money) that is lost.
 

Dave Doering

Sophomore Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Missouri
My usual tact on situations where my current appraisal is being compared to a previous appraisal is to state that I can not speak for the accuracy or cirmunstances of the prior appraisal without seeing it. A number of times the alleged "higher" appraisal never materializes.

It if there is a higher appraisal, it is possible that the perameters of the prior appraisal may be different from those of the current opinion of value. For example, the site size might be different or the value may have included certain improvements, or non-realty items that are not appropriate for the current assignment.

However, in most cases what I have found is the prior appraisal was overvalued by an appraiser trying to make someone happy for a refi or to validate their over-opinion of the value of their property.

If I were the current borrower/purchaser, I would be very grateful to have a well supported appraisal that reflect the value of the property I was buying rather than one that merely confirms the sales price. Afterall, if the property is overvalued, it is there equity (money) that is lost.
 

liznindy

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Indiana
The strange thing is my opinion of value came in at purchase price for the property as the purchase price fell with the range of value of the four comparables after adjustments.

The buyer is upset because he/she believed they were purchasing a home with "instant equity" (per seller) of around $80,000.
 

Charlotte Dixon

Senior Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Delaware
It is difficult explaining the appraisal process to the general public who tend to believe appraisals to be the sum of all components instead of what the market will pay.

Difficult? No, Impossible! I can relate to your situation. I did one and it came in $10,000 less than appraiser #1 two years ago, and it was new construction then. Of course, appraiser #1 counted a room over the garage as finished, when that 250 sf was not finished. No grading/seeding was ever done. The fireplace was not completely installed and finished with ceramic and the house is on a private road with no maintenance agreement because appraiser #1 said public road. In addition, the yard was junked up with debris. I did the appraisal in October (V.A. Appraisal) and now the borrowers are challanging the appraisal because there is a new sale which they think will help their cause. Give me a break!
 

Tim The Enchanter

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
I agree with Mike. I avoid discussing with the homeowner or borrower, and if it comes down to it,
put together a well crafted letter and blow-apart the objections of the uneducated complaintant.
:twisted:
 

Ed Potrafke

Sophomore Member
Joined
Dec 17, 2002
That's exactly why I have a disclosure on my receipt to the owner. It more or less states that I cannot speak with anyone but the lender about the appraisal, due to confidentiality laws. It goes on to say that they should contact thier lender with any and all questions.

I go over this with them, when I give them the receipt.



Ed Potrafke
 
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