You Appraisal is Shady

Ok, I am about to vent so, if you don’t want to hear an angry rant about how I feel, it’s best you stop reading now and move on! I have this short sale, since January and it’s in poor condition. For example, pipe burst in ceiling, sever mold, exposed sub-flooring through 75% of home, torn wall paper, huge holes in walls, missing fixtures, standing water in crawl space, etc….get the idea? It’s in poor condition and my contractor estimated 30k ($30,000.00) in repairs to make it livable! Since it has been on the market, I have received approximately 10 or so offers, all of which were below $70K except one which was $89,900.00. The bank countered or rejected all offers (all these offers came in the first 2 months)! Surprised and perplexed I asked why and I was told because the appraisal came in at $110,000.00 and that is what they expect to get. So, 2 months turns into 6 and, no offers. In the meantime, I have provided a CMA / BPO showing these freaks, the home is worth 60k at best! THEY AREN’T LISTENING TO ME! So, the negotiator says, we can now order a new appraisal. Excited, I meet the appraiser out there and show him my BPO, show him my comps, show him my search criteria, show him the feedback comments of the agents who have shown the home, which are months old because no one has shown the home in months. A week later, I get the appraisal from the negotiator and it’s $100,000.00! 10k less than the original (UGH!) So, I have it listed at $100,000.00 now and not a single showing / offer, what is it going to take! I asked if I can rebut the appraisal, sure….so I send my rebuttal in and I am told, none of these homes are adequate because they aren’t like homes. I am tripping because my comps are from the neighborhood and less than a quarter mile from the subject property! These are tract homes by the same builder…..why wouldn’t they be similar? I looked at the appraiser’s comps and they aren’t even in the same neighborhood!!!!!!!!!! So, I asked, can we get our own appraisal, they say yes so, we are now on the hunt for an appraiser. I will keep this blog up to date, I am sure you will love to know where I go with this one.

I just had the exact opposite situation where I wanted an appraisal to come in low and couldn't get it. I wanted it to come in low because some ignorant buyer offer 25% above my BPO value. I told my AM that there wasn't a snowballs chance in hell it would appraise at the purchase price. Magically, the appraisal comes in exactly at purchase price.

Comp 1=extremely similar property in similar to superior condition but to help his cause, the appraiser puts in a $60k condition adjustment claiming the comp was poor condition and the subject was in average condition. The subjects roof was caving it, the wood siding was termite city and the foundation was completely shot on the subject. The comp had none of these problems.

Comp #2=103% more sq ft. The avg price/sq ft in the area was $200. He decided to use a pathetic $20/sq ft adjustment.

Comp #3=35% less sq ft and in far superior condition. $0 condition adjustment.

Meanwhile, there were 10 comps with 20% sq ft and in similar condition available that he neglected to use. All 10 supported my BPO value. Sometimes you just can't win with appraisers! The net result was that I looked like an idiot to my AM because in his eyes, I don't know my values.

You need to be a member of REO Pro Network to add comments!

Join REO Pro Network

Comments

Kyle Whissel August 19, 2009 at 7:37am

I think two appraisals should be done on every property just like two BPOs (or a BPO and appraisal) are done on all of our listings. This would help correct some of the skewed appraisals we have begun to see popping up again.

I also feel that appraisers have no business knowing the purchase price on the contract. They seem to have an uncanny ability to appraise properties for the exact purchase price exactly far too often. How can they provide an unbiased appraisal of value when they have been given a subliminal target to hit?
Denise Stovall August 19, 2009 at 3:08am

Jesse, Ugggg!

It is a darn shame that Appraisers and their not at market values seem to be of superior opinion than Realtor's feed back and forum.

I believe this situation could have been remedied by some sort of greivance of value forum...getting your own appaisal would seem to be the answer but....the waters have been tested you have put it out to market, feedback, showings and offers should be the superior method of determining value or supporting a well "comped" appraisal. This is a difficult seller situation...sorry for you. Good luck. Keep me posted.

Denise Stovall
Sonoma County, Northern California
CJ Oliver August 18, 2009 at 3:31pm

Jesse, I think that the appraisers are being sent far out of their comfort zones and are trying to tip-toe through the process. I believe what we are seeing is pulling comps to match somewhere close to the tax value or the security deed within about 70%. I think they figure they can't go wrong if they tell the banks it's worth a number that actually have some basis in fact. I just don't think they are adjusting properly for market influences and deterioration. Good luck and keep trying.
Frank Popeleski August 18, 2009 at 12:37pm

And appraisers are now swaking about the criteria of knowing the market area they are doing the appraisal in! Jesse looks like we are getting back to the same old BS that got us to where we are today. Appraisers over appraising.
Kristine LaDue-Klink August 18, 2009 at 7:39am

Good Luck and keep us posted!
Jesus (Jesse) Gonzalez August 18, 2009 at 6:34am

Kristine:

I didn't think about that but, that is a good idea.
Kristine LaDue-Klink August 18, 2009 at 6:24am

The "shady appraisal" was one of the major contributors to the fine mess this country is currently in. I guess the best effort you can afford is to go to the power's that be in your state, i.e. reg and license, etc. These blatant misuses should be stopped in their tracks. This would be a sure fire way to get that accomplished I would suspect.
Kyle Whissel August 17, 2009 at 6:23pm

I just had the exact opposite situation where I wanted an appraisal to come in low and couldn't get it. I wanted it to come in low because some ignorant buyer offer 25% above my BPO value. I told my AM that there wasn't a snowballs chance in hell it would appraise at the purchase price. Magically, the appraisal comes in exactly at purchase price.

Comp 1=extremely similar property in similar to superior condition but to help his cause, the appraiser puts in a $60k condition adjustment claiming the comp was poor condition and the subject was in average condition. The subjects roof was caving it, the wood siding was termite city and the foundation was completely shot on the subject. The comp had none of these problems.

Comp #2=103% more sq ft. The avg price/sq ft in the area was $200. He decided to use a pathetic $20/sq ft adjustment.

Comp #3=35% less sq ft and in far superior condition. $0 condition adjustment.

Meanwhile, there were 10 comps with 20% sq ft and in similar condition available that he neglected to use. All 10 supported my BPO value. Sometimes you just can't win with appraisers! The net result was that I looked like an idiot to my AM because in his eyes, I don't know my values.
Beth Ross August 17, 2009 at 12:51pm

Ouch! Do you suppose you can order an appraiser from overseas to perform it? LOL just trying to add a touch of humor to this sad situation! i wish you the best!!
Steve Adkins August 17, 2009 at 9:11am

Some days, short sales are just not worth the trouble!

This reply was deleted.