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Urgent question

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Ray Miller

Thread Starter
Elite Member
Joined
Feb 20, 2002
Professional Status
Licensed Appraiser
State
Wisconsin
I sent an appraisal to a lender yesterday. Got a call back that I was under market value. :cry: They had an appraisal from May that brought the subject in at $112,000. Using all two story homes, Victorian homes as far away as 3/4 of a mile. :roll:

I brought the subject in at $98,000 using like comparable’s of cape COD homes within a couple of blocks of the suject. :?

The neighborhood is all cape cods. The neighbor hood is about six blocks by 8 blocks. It is bounded on the west by the Wisconsin River on the North by the business district, on the south by I-39. State Hwy 33 and State Hwy 16. All homes in the neighbor hood has sold for 79,000.00 to $99,000. The subject sold for in late 1999 for $77,000. :wink:

I think I know the answer to the next question, but I am going to ask it. As I am starting to question my self. :eek:nfire:

I have about 12 comps to choose from. I thought I was using the best. I would not be correct to use different types of comps and go out of the neighbor hood would I?

This trend I am seeing in our area is doing this to get value.

Another example: I did a rural property that I brought in at $98,000.00. I used comps within five miles. They needed $200,000.00. The subject was on the market for $149,000.00 and not selling. They caned my appraisal and sent it to another appraiser. They brought it in at $160,000.00 using comps 27 miles away and with a lot of equine improvements and closer to the Madison area. The subject was 82 miles from Madison and off the I system. The comps they used were just off the I system by a mile and about 50 to 55 miles to Madison.

Now the kicker to this is the lender had a review appraiser take a look at the report that was up and he brought the subject in at $108,000.00.

But the mortgage company is still up tight with me for the $98,000.00 figure.

Is it a 50/50 split between appraisers that don’t fudge their numbers and the one’s that do?
 

larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
Ray:

Don't blink and hold your ground if you believe you're right. You can best defend what you do, not what someone else does. I believe you knew the answers to your questions before you ask them.
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
They had an appraisal from May that brought the subject in at $112,000. Using all two story homes, Victorian homes as far away as 3/4 of a mile

I agree, stick to your guns.

I also suggest that you do all the appraisers in the area a favor. Play dumb and ask for a copy of the other appraisal because he might have something you missed. Then if it is bad work write up a review and turn it in to your board. If we appraisers don't develop some backbone and police our own we are going to get what we deserve.

Number hitters are turning this profession into a laughing stock in the eyes of the lenders and mortgage brokers. If it keeps up they really have a good arguement for not needing appraisals.
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
Ray

Sounds like you did just fine.

The bad appraisal was caught by the reviewer and he/she came quite close to what you have.

I sometimes, as a reviewer, will come up higher than the appraiser. It sounds like there was an attempt on the reviewers part to find a compromise and one that made your appraisal look good. The reviewer did not take sides, but is within reason of your value, so I would feel good if I were you.

It appears to me that you and the reviewer did a good job. Good, sometimes wins over evil. :D
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Ray,

Be proud of yourself! Sounds to me like you did what a real Appraiser is supposed to do. Hang on and don't let them get to you!


Number hitters are turning this profession into a laughing stock in the eyes of the lenders and mortgage brokers. If it keeps up they really have a good arguement for not needing appraisals.

Unfortunately, not just in the eyes of the lenders and mortgage brokers. Even the general public thinks we are involved only to rubber stamp what we are told to.

50/50 ? Sometimes I think it might be worse than that. :(
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
What would the buyers do? That's the real question. Your neighorhood on the Cape COD might be a little small. If you were trying to acting the part of the selling agent what other nearby subdivisons would you show a buyer who wanted an older, mulit story home. I'm not saying look around to hit a number I'm making the point that a good appraisal reflects the actions of the buyers in a particular market segement. Some times the best comparables are outside the industry preference of time or distance.

With respect to the rural property, based on the information you provided you're right and don't need to question any of your actions or analysis.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Ditto, keep doing a good job. Ignore the LO's comments, and go find a new-better-more respectful client so you can dump this moron.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Ray,
I agree with everyone else, but if you have any doubts the best thing you can do is take a good look at the under contract and active listings in the subject neighborhood. This will be your best gauge to check if you are missing an increasing market trend, or it will be your best weapon to defend that you know there isn't one.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
50/50? I'd rather venture it is 1/3, 1/3, 1/3.

1/3 are deliberately number hitters.

1/3 are either doing something that they are not competent to do or, by flawed logic or lack of a real instinct thus come up with the wrong answer (up or down). The remaining 1/3 are competent.

All of us probably have taken on a property that is over our head, so to speak, at one time or another. Only those with the best instinct are going to not have some serious flaws in that report.

Sample, close to home. Old historic house was left on a lot commercial zoned and the remaining acreage was divided into frontage commercial lots and the rear acreage into residential lots. Appraiser appraised as a house (despite the C-1A zoning and use as an office) using similar old historic houses, coming in 135,000.

Lender balked and I had to do the fix. Using other houses converted to offices (a tea room, a title company, a flower shop, and a bookkeeping office) I came in about 10% lower. The appraiser knew how to appraise a house, is married to the URAR, so that's how he appraised it. WRONG! although he is quite competent to do houses, His H & B Use analysis was dead wrong.

The smart CR would have turned down the assignment - or got some advice.
 

maitca

Freshman Member
Joined
Feb 11, 2002
Professional Status
Certified General Appraiser
State
Florida
This is a lender you need to FIRE. FIRE that lender right now. Call that loan officer on the phone, tell him/her that, effective immediately, their bank is off your approved lender list, you will NEVER again accept any work from them, and you will recommend that any potential buyers with whom you come in contact should go to an ethical, honest lender that cares about not only its borrowers, but its depositors as well. Then send the lender's prez and entire board of directors a long letter detailing what you did and why you did it. Send a copy of the letter to your local newspaper and make sure that CC has a yellow highlight so the prez and the BOD see it. You might even want to CC all your good clients, as well. Then, complain to Federal banking officials and make sure the prez and BOD know of your complaint. Finally, revamp your resume' and hit the street to find more clients to make up for this loser you just fired.

Will all this hurt? Yes. Will you get a reputation as a boat-rocker and whiner? Yes. Will some powerful people take umbrage at your forthrightness? Yes. But eventually you will win because you are right and they are wrong! Until we as an industry grow a collective set of cojones and take back what is rightfully ours, the money-salesmen will continue to abuse use like this. Real lenders, however, want and value our advice because we help them avoid disastrous decisions.

Maybe I'm wrong, but who knows until we try?! :twisted:
 
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