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VA Appraisal Came In Unrealistically Low

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Lon Williford

Freshman Member
Joined
Jun 23, 2017
Professional Status
General Public
State
Texas
We had had our house listed at 139900 and buyer raised price to 143900 to cover for closing costs. VA appraiser came in and only spent about 10 minutes on the property and left. After 7 days the appraisal came in at 122000. My house is brick with New roof, new sheetrock, new a/c, new water heater, new appliances, and new flooring (1196 square feet). We also got a clean bill of health from both the home and foundation inspector, plus the appraiser had no list of repairs.
In my neighborhood 2 houses about 100 sf less sold for 106 psf and in a neighborhood less than a mile away two more at about 300 sf more for 106 psf. I know my house was high but based on the comps provided to us at the time we listed and contracted both realtors thought it would appraise on the money. Both realtors were shocked.
So, with all that said, I'd really like to know why, with comps available, did my house come in less than 106 psf at 102 psf?
I've read that VA appraisers wil try to sew equity into a loan so that when the buyers default, the lender can make money on the home. If this is true then it seems to be very unethical and should be illegal considering the appraiser should have no involvement with either the buyer, the seller, or the lender.
So, what's the deal? And can I do anything about a bad VA appraisal? The lender said the appraisers "ruling" was final.
 

Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
We had had our house listed at 139900 and buyer raised price to 143900 to cover for closing costs. VA appraiser came in and only spent about 10 minutes on the property and left. After 7 days the appraisal came in at 122000. My house is brick with New roof, new sheetrock, new a/c, new water heater, new appliances, and new flooring (1196 square feet). We also got a clean bill of health from both the home and foundation inspector, plus the appraiser had no list of repairs.
In my neighborhood 2 houses about 100 sf less sold for 106 psf and in a neighborhood less than a mile away two more at about 300 sf more for 106 psf. I know my house was high but based on the comps provided to us at the time we listed and contracted both realtors thought it would appraise on the money. Both realtors were shocked.
So, with all that said, I'd really like to know why, with comps available, did my house come in less than 106 psf at 102 psf?
I've read that VA appraisers wil try to sew equity into a loan so that when the buyers default, the lender can make money on the home. If this is true then it seems to be very unethical and should be illegal considering the appraiser should have no involvement with either the buyer, the seller, or the lender.
So, what's the deal? And can I do anything about a bad VA appraisal? The lender said the appraisers "ruling" was final.

Since we don't know the actual market you are in it is hard to make statements about good or bad appraisals. Have you seen the appraisal? There are many other factors besides psf that to into the valuation of a home. Lot size, bath count, improvements (pools, barns, etc) all effect the psf of a home outside of the GLA. Is it possible your home is smaller than advertised? There are so many factors, that we cannot really make judgements. It is possible that it is a good appraisal, not a bad appraisal. Just because it is lower than sales price it does not mean it is a bad appraisal. That being said, appraisers can make mistakes and there are some appraisers that are not as good as others (just like teachers, police, real estate agents, store managers, etc).

I would suggest you ask for a copy of the appraisal before judging it was a bad appraisal. It is possible that there were other factors that the agents or you did not consider. For example, I just did a house that backed to a large gas well. The agent and the owner did not consider the adverse affect of backing to the gas well that the other homes backing to a gas well reflected. I don't know because I don't know your property, the appraisal or your actual market. You can always ask the lender to get the appraisal reviewed, but that is their call as they are loaning on the collateral. However, the appraisal is for the lender, not the seller so they will most likely support the appraiser unless errors and omissions are made.
 

Lon Williford

Freshman Member
Joined
Jun 23, 2017
Professional Status
General Public
State
Texas
Since we don't know the actual market you are in it is hard to make statements about good or bad appraisals. Have you seen the appraisal? There are many other factors besides psf that to into the valuation of a home. Lot size, bath count, improvements (pools, barns, etc) all effect the psf of a home outside of the GLA. Is it possible your home is smaller than advertised? There are so many factors, that we cannot really make judgements. It is possible that it is a good appraisal, not a bad appraisal. Just because it is lower than sales price it does not mean it is a bad appraisal. That being said, appraisers can make mistakes and there are some appraisers that are not as good as others (just like teachers, police, real estate agents, store managers, etc).

I would suggest you ask for a copy of the appraisal before judging it was a bad appraisal. It is possible that there were other factors that the agents or you did not consider. For example, I just did a house that backed to a large gas well. The agent and the owner did not consider the adverse affect of backing to the gas well that the other homes backing to a gas well reflected. I don't know because I don't know your property, the appraisal or your actual market. You can always ask the lender to get the appraisal reviewed, but that is their call as they are loaning on the collateral. However, the appraisal is for the lender, not the seller so they will most likely support the appraiser unless errors and omissions are made.

Granbury tx, the home sf is as advertised. We weren't allowed to see the appraisal, same everything as other houses 3brm 2bth except the two in my neighborhood don't have driveways or garages. All the houses have improvements but mine had been gutted, it was completely redone including a new roof.
 

Lon Williford

Freshman Member
Joined
Jun 23, 2017
Professional Status
General Public
State
Texas
Since we don't know the actual market you are in it is hard to make statements about good or bad appraisals. Have you seen the appraisal? There are many other factors besides psf that to into the valuation of a home. Lot size, bath count, improvements (pools, barns, etc) all effect the psf of a home outside of the GLA. Is it possible your home is smaller than advertised? There are so many factors, that we cannot really make judgements. It is possible that it is a good appraisal, not a bad appraisal. Just because it is lower than sales price it does not mean it is a bad appraisal. That being said, appraisers can make mistakes and there are some appraisers that are not as good as others (just like teachers, police, real estate agents, store managers, etc).

I would suggest you ask for a copy of the appraisal before judging it was a bad appraisal. It is possible that there were other factors that the agents or you did not consider. For example, I just did a house that backed to a large gas well. The agent and the owner did not consider the adverse affect of backing to the gas well that the other homes backing to a gas well reflected. I don't know because I don't know your property, the appraisal or your actual market. You can always ask the lender to get the appraisal reviewed, but that is their call as they are loaning on the collateral. However, the appraisal is for the lender, not the seller so they will most likely support the appraiser unless errors and omissions are made.

Also the house backs up to a what used to be Boy Scout property and is now beautiful private property. An excellent view to have in my backyard.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I've read that VA appraisers wil try to sew equity into a loan so that when the buyers default, the lender can make money on the home.
That describes no appraiser I've met. The job of appraiser is to value the home independent of the seller's bias, and as noted we don't have access to your situation. We value the whole however, and price per SF is not an element of comparison. Your "view" is not readily tangible, nor easy to calculate.
 

Lon Williford

Freshman Member
Joined
Jun 23, 2017
Professional Status
General Public
State
Texas
You sound like a doctor or car salesman. No one wants to admit that there could possibly be any wrong doing. Think about evaluating the whole - completely gutted and remodeled 1200 sf home with new roof, Sheetrock, flooring, appliances, a/c, water heater, 7500sf lot, no problems what so ever, safe neighborhood, etc. etc. etc. I have no reason to be dishonest as I don't know any of you and you can't do anything for me. I'm just asking if you think it sounds ethical for an appraisal to be done and I could not see it or dispute it. No one should feel their that their character is being threatened. I'm sure you will think it a coincidence that zillow and the appraisal were exactly the same but I can not prove otherwise because neither I nor my realtor were allowed to see the appraisal. That seems like hokum to me.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Your area isn't mine but my house is 1200 SF. And here in NW AR, we can build new for $95/SF. Lots are cheap-$15k all day long. But that's not your market. By its very nature remodeling (gutted) creates functional obsolescences. Turn it into the state and tell them he/she was too low and see how far it goes. Don't be surprised if it is dismissed. It is an opinion after all. It is still a remodeled house.
No one wants to admit that there could possibly be any wrong doing.
But your bias to claim appraisers "sew" (inflate?) value suggest you are not looking at the appraiser or appraisal objectively. Such wive's tales suggest a collusion that does not exist, regardless the competence of the appraiser. The blame game does not endear you with a forum of appraisers you choose to lambast in a blanket fashion. And, it is obvious that your criticism rests entirely upon your own appraisal and the Realtor who is paid on commission, unlike the appraiser who has no dog in the fight, except to defend his appraisal should the buyer go into default and face the loss of license due to "sewing" value. Not my job.
 

sandpiperapp

Senior Member
Joined
Apr 5, 2011
Professional Status
Certified Residential Appraiser
State
New York
Lon. I am a VA appraiser. I do not work in your area, but I can tell you that there is no benefit for the appraiser to bring an appraisal in low for the lender or the VA. Actually, it is more work and typically more aggravation when the appraised value does not support the sales contract price. We do try and value each property according to the data that is available. I cannot comment on your specific situation, but just wanted you to know the appraiser, lender, or the VA gains nothing from this situation.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
So, what's the deal? And can I do anything about a bad VA appraisal? The lender said the appraisers "ruling" was final.
I am not a VA appraiser, but, you need to inquire with your lender as to why the appraiser did not initiate the Tidewater procedure

In brief summary, the Tidewater procedure allows an opportunity for a designated “Point of Contact” to provide market evidence for the appraiser’s consideration prior to establishing the final URAR value. The appraiser initiates the procedure by alerting the Contact person that the appraised value appears likely to come in under the sales price.

This process allows you the opportunity to have some input into the process when the opinion of value is going to come in below the contract price for VA loans.

Hope this helps. Best of Luck
 

Lon Williford

Freshman Member
Joined
Jun 23, 2017
Professional Status
General Public
State
Texas
Your area isn't mine but my house is 1200 SF. And here in NW AR, we can build new for $95/SF. Lots are cheap-$15k all day long. But that's not your market. By its very nature remodeling (gutted) creates functional obsolescences. Turn it into the state and tell them he/she was too low and see how far it goes. Don't be surprised if it is dismissed. It is an opinion after all. It is still a remodeled house.

But your bias to claim appraisers "sew" (inflate?) value suggest you are not looking at the appraiser or appraisal objectively. Such wive's tales suggest a collusion that does not exist, regardless the competence of the appraiser. The blame game does not endear you with a forum of appraisers you choose to lambast in a blanket fashion. And, it is obvious that your criticism rests entirely upon your own appraisal and the Realtor who is paid on commission, unlike the appraiser who has no dog in the fight, except to defend his appraisal should the buyer go into default and face the loss of license due to "sewing" value. Not my job.

I'm not blaming all appraisers I'm simply asking why
Lon. I am a VA appraiser. I do not work in your area, but I can tell you that there is no benefit for the appraiser to bring an appraisal in low for the lender or the VA. Actually, it is more work and typically more aggravation when the appraised value does not support the sales contract price. We do try and value each property according to the data that is available. I cannot comment on your specific situation, but just wanted you to know the appraiser, lender, or the VA gains nothing from this situation.
this is pointless. Are you a VA appraiser? If not, why assume that all appraisers appraise the same. Why would the lender not want me to see the appraisal report and not be willing to allow the VA "reconsideration of value?" This is the problem I have. Not with appraisers as a whole.
 
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