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VA vs Conventional Appraisal

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gabound1505

Thread Starter
Freshman Member
Joined
Dec 10, 2010
Professional Status
Real Estate Agent or Broker
State
North Carolina
A VA appraiser apprasied a new construction home in NC sales price $276,000. He appraised it at $269,000. He went outside the county and choose comps 7 miles away. The builder paid for a conventional apprasial and that appraisal came back at $335,000. The lender did a reconsideration of value and sent the new comps (which 2 comps were in the same subdivision of the new home) to the VA appraiser and he refused to use them. Is the VA appraiser's answer final?
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
A VA appraiser apprasied a new construction home in NC sales price $276,000. He appraised it at $269,000. He went outside the county and choose comps 7 miles away. The builder paid for a conventional apprasial and that appraisal came back at $335,000. The lender did a reconsideration of value and sent the new comps (which 2 comps were in the same subdivision of the new home) to the VA appraiser and he refused to use them. Is the VA appraiser's answer final?

First things first. All VA Appraisers are to comply with the "Tidewater Iniative"(TI) which requires that all VA appraisers MUST contact the lender or the designated POC(Point of contact) if the appraised value may be lower than the sales/contract price. The appraiser must then give the lender/POC 48 hours to submit anything the lender/POC wants the appraiser to consider. Did the VA Appraiser do that? If not, then the VA appraiser is open to sanction by the VA RLC.

If he/she did, and the sales/comps in the opinion of the VA appraiser were not useable, then that is the VA Appraisers opinion.

The next step would be for the Lender to ask for a reconsideration of value. If the lender is still not satisfied then the lender can ask that the appraisal report be field reviewed. If the review appraiser disagrees with the original VA Appraiser he/she can ask the RLC to accept a different opinion.

I have no idea who is right or wrong in all of this. This is how it works. And, no, the VA appraisers opinion is not absolute. But it is up to the RLC(Regional Loan Center) to make a final determination.
 

gabound1505

Thread Starter
Freshman Member
Joined
Dec 10, 2010
Professional Status
Real Estate Agent or Broker
State
North Carolina
The reconsideration was complete and the comps were sent to the appraiser. He emailed the lender stating that he stands by his opinion of the home. He said "All of the comps used by the other appraiser were much better quality homes and they were not adjusted for quality". The subject home was siding/stone and the comps were brick/ven. This is a $66,000 difference of opinions. How much adjustment does one make.
 

Riick

Elite Member
Gold Supporting Member
Joined
Aug 14, 2007
Professional Status
Certified Residential Appraiser
State
Delaware
The reconsideration was complete and the comps were sent to the appraiser. He emailed the lender stating that he stands by his opinion of the home. He said "All of the comps used by the other appraiser were much better quality homes and they were not adjusted for quality". The subject home was siding/stone and the comps were brick/ven. This is a $66,000 difference of opinions. How much adjustment does one make.
Only your local market can tell you that; there IS no book or table.
On the other hand, are exterior materials are the only difference between these homes,
no difference in quality of kitchen, baths, flooring, tile work,etc., etc., ???
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
Only your local market can tell you that; there IS no book or table.
On the other hand, are exterior materials are the only difference between these homes,
no difference in quality of kitchen, baths, flooring, tile work,etc., etc., ???
And....square footage, interior improvements, builder extras, incentives, etc.

Adjustments are based on MARKET REACTION, not cost. If a feature (an item having it's own line item cost) cost $10,000.00 but you have several sales where that feature was present and several sales where it was not, and the range of what the market was willing to pay was $2,000 to $6,000 for that feature, then the appraiser would need to make a judgement within that range of market reaction.

As I stated before, the RLC will make the final determination if it is appealed.
 

Jerry Bone Jr

Senior Member
Joined
Feb 23, 2004
Professional Status
Licensed Appraiser
State
Oregon
A VA appraiser apprasied a new construction home in NC sales price $276,000. He appraised it at $269,000.
This I can believe. Let me guess...there was $7000 in seller concessions???

The builder paid for a conventional apprasial and that appraisal came back at $335,000.
This I don't believe, unless there's more to the story. Was this $335k appraisal from 2 years ago? Why would the builder sell at $276k, when the property is "worth" $335k ?

Is the VA appraiser's answer final?
Yes
 

gabound1505

Thread Starter
Freshman Member
Joined
Dec 10, 2010
Professional Status
Real Estate Agent or Broker
State
North Carolina
The conventional appraisal was just completed last week. The VA appraisal was complete 2 weeks ago. All of this is happening right now. Neither the builder or the VA appraiser will adjust the price of the home. Sellers concessions is only $2,000.
 

gabound1505

Thread Starter
Freshman Member
Joined
Dec 10, 2010
Professional Status
Real Estate Agent or Broker
State
North Carolina
The interior of the home is is compatable to the other homes in the s/d. The subdivision is an established s/d with homes up to 1 million dollars. Most of the homes are brick and the new construction home is vinyl but the home is almost 3200 sq. ft. The brick homes are between 2400 -2600 sq. ft. The conventional appraiser is stunned about the VA appraiser's opinion. This is happening today. Closing was scheduled the end of November. Neither the builder nor the VA appraiser will adjust the price.
 

gabound1505

Thread Starter
Freshman Member
Joined
Dec 10, 2010
Professional Status
Real Estate Agent or Broker
State
North Carolina
Don,
Thank you. This is great information.
 
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