Author Topic: Incomprehensible appraisal value  (Read 1663 times)

sailinlight

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Incomprehensible appraisal value
« on: May 03, 2021, 07:23:13 PM »
Has anyone ever received an appraisal that is completely out of touch with reality? I'm trying to refinance a property I own which is about five acres with four single family homes on it. We paid $550k for it, which it appraised for, about four years ago. Subsequently I put significant improvements into the largest of the homes including a new HVAC system, interior and exterior paint, new flooring and new appliances. Additionally real estate values here have been on a tear as it has been with most rural areas of late. Realtors I've talked to value the property at around $900k.

We've been trying to a cash-out refinance since we only owe about $350k, and so the bank ordered an appraisal. For some unbelievable reason, it came back at $450k. There are a ton of reasons that the comps which were compared against are invalid and have no bearing on the value of this property which has many unique characteristics. For instance, it has about a half acre of grape vines which are irrigated through free non-potable water. One of the comparable properties listed was a 4-plex apartement building with no land. I know that sounds petty, but that's one of the many inconsistencies in the report.

Obviously, due to this, the bank is backing out of the loan commitment unless I can convince the appraiser to re-evaluate. I guess my question is, has anyone been in a similar situation and been successful in getting a new valuation due to obvious errors and common-sense market conditions?

uniwelder

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Re: Incomprehensible appraisal value
« Reply #1 on: May 03, 2021, 07:49:21 PM »
Sounds just like my experience.  2 years ago we applied for a heloc and the bank appraisal came back around 90k.  We just (closed Friday) sold that house for 175k, and there has been some appreciation in that time, but not nearly that much.  I was able to argue up the value for the heloc to 108k, but it was ridiculous seeing how the appraiser was valuing the property and the comps that were used.

In your case, I don't think the appraiser cares about the improvements you mentioned, as those listed are normal maintenance.  Also not sure what bearing the vineyard would have-- I can't imagine that having any value in an appraiser's mind.

Do you have other properties (comps) to use as reference for arguing your case?  If you think its worth 900k, you need to show the bank/appraiser other recently sold properties.

Michael in ABQ

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Re: Incomprehensible appraisal value
« Reply #2 on: May 03, 2021, 08:25:30 PM »
Has anyone ever received an appraisal that is completely out of touch with reality? I'm trying to refinance a property I own which is about five acres with four single family homes on it. We paid $550k for it, which it appraised for, about four years ago. Subsequently I put significant improvements into the largest of the homes including a new HVAC system, interior and exterior paint, new flooring and new appliances. Additionally real estate values here have been on a tear as it has been with most rural areas of late. Realtors I've talked to value the property at around $900k.

We've been trying to a cash-out refinance since we only owe about $350k, and so the bank ordered an appraisal. For some unbelievable reason, it came back at $450k. There are a ton of reasons that the comps which were compared against are invalid and have no bearing on the value of this property which has many unique characteristics. For instance, it has about a half acre of grape vines which are irrigated through free non-potable water. One of the comparable properties listed was a 4-plex apartement building with no land. I know that sounds petty, but that's one of the many inconsistencies in the report.

Obviously, due to this, the bank is backing out of the loan commitment unless I can convince the appraiser to re-evaluate. I guess my question is, has anyone been in a similar situation and been successful in getting a new valuation due to obvious errors and common-sense market conditions?

Former commercial appraiser here. I never did single family homes but I know the basics. My first thought when looking at a property with four homes is that an investor is the most likely buyer. Not a lot of owner-occupants looking to buy four houses on a five-acre property unless it's going to be a family compound. If you're in a rural area, rental data and investment sales are probably going to be hard to come by so the sale of a 4-plex on a typical lot isn't completely unreasonable. 

The value of a half-acre of grape vines to an investor is basically zero. To an owner-occupant, it's probably worth something, but not much. If you've got a lot of unique amenities it's going to be very hard to determine the value of those from the market. Compare 10 similar houses that sold with pools to 10 that sold without and you can extract a range of values for how much a pool is worth. If you've got a pool, a huge outdoor kitchen, a shop building, etc. it becomes much harder to extract the value of all those extra features. Also, a buyer make look at that whole package of amenities and decide it's only worth a fraction of what they would cost to build because they only care about the shop building but not the pool or outdoor kitchen.


All that being said, contact your lender and point out what you think are errors and if possible, provide better data (try those Realtors who said it's worth $900k). That means closed sales of similar properties, i.e. rural properties with multiple homes. Don't try to contact the appraiser. You are not their client, the lender is. They have no relationship with you and have a duty to maintain confidentiality with their client. The appraiser may have done a shitty job, but it sounds like a fairly difficult property to appraise and the bank may have just hired the cheapest fastest appraiser out there with no regard for their experience.
« Last Edit: May 03, 2021, 10:26:02 PM by Michael in ABQ »

sailinlight

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Re: Incomprehensible appraisal value
« Reply #3 on: May 03, 2021, 09:53:43 PM »

Former commercial appraiser here. I never did single family homes but I know the basics. My first thought when looking at a property with four homes is that an investor is the most likely buyer. Not a lot of owner-occupants looking to buy four houses on a five-acre property unless it's going to be a family compound. If you're in a rural area, rental data and investment sales are probably going to be hard to come by so the sale of a 4-plex on a typical lot isn't completely unreasonable. 

The value of a half-acre of grape vines to an investor is basically zero. To an owner-occupant, it's probably worth something, but not much. If you've got a lot of unique amenities it's going to be very hard to determine the value of those from the market. Compare 10 similar houses that sold with pools to 10 that sold without and you can extract a range of values for how much a pool is worth. If you've got a pool, a huge outdoor kitchen, a shop building, etc. it becomes much harder to extract the value of all those extra features. Also, a buyer make look at that whole package of amenities and decide it's only worth a fraction of what they would cost to build because they only care about the shop building but not the pool or outdoor kitchen.


All that being said, contact your lender and point out what you think are errors and if possible, provide better data (try those Realtors who said it's worth $900k). That means closed sales of similar properties, i.e. rural properties with multiple homes. Don't try to contact the appraiser. You are not their client, the lender is. They have no relationship with you and have a duty to maintain confidentiality with their client. The appraiser may have done a shitty job, but it sounds like a fairly difficult property to appraise and the bank may have just hired the cheapest fastest appraiser out their with no regard for their experience.
Hmm, thanks for the advice. I guess it makes sense but is unfortunate. We'll probably just sell the place at this point. A lot of things don't make sense when valuing the property as an investment as well. For instance, one of the "comps" they pulled was a triplex with three 2/2 units. Ours is a four unit property with three 2/1s and one 3/2. The appraiser added $6k for each of the three units in the triplex because they have an extra bathroom, but only subtracted $8,500 for the lack of extra rental unit! Clearly an extra house that rents for $1200/month has to be worth at least $155,000 due to his own monthy rent multiplier calculation.

Michael in ABQ

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Re: Incomprehensible appraisal value
« Reply #4 on: May 03, 2021, 10:28:52 PM »

Former commercial appraiser here. I never did single family homes but I know the basics. My first thought when looking at a property with four homes is that an investor is the most likely buyer. Not a lot of owner-occupants looking to buy four houses on a five-acre property unless it's going to be a family compound. If you're in a rural area, rental data and investment sales are probably going to be hard to come by so the sale of a 4-plex on a typical lot isn't completely unreasonable. 

The value of a half-acre of grape vines to an investor is basically zero. To an owner-occupant, it's probably worth something, but not much. If you've got a lot of unique amenities it's going to be very hard to determine the value of those from the market. Compare 10 similar houses that sold with pools to 10 that sold without and you can extract a range of values for how much a pool is worth. If you've got a pool, a huge outdoor kitchen, a shop building, etc. it becomes much harder to extract the value of all those extra features. Also, a buyer make look at that whole package of amenities and decide it's only worth a fraction of what they would cost to build because they only care about the shop building but not the pool or outdoor kitchen.


All that being said, contact your lender and point out what you think are errors and if possible, provide better data (try those Realtors who said it's worth $900k). That means closed sales of similar properties, i.e. rural properties with multiple homes. Don't try to contact the appraiser. You are not their client, the lender is. They have no relationship with you and have a duty to maintain confidentiality with their client. The appraiser may have done a shitty job, but it sounds like a fairly difficult property to appraise and the bank may have just hired the cheapest fastest appraiser out their with no regard for their experience.
Hmm, thanks for the advice. I guess it makes sense but is unfortunate. We'll probably just sell the place at this point. A lot of things don't make sense when valuing the property as an investment as well. For instance, one of the "comps" they pulled was a triplex with three 2/2 units. Ours is a four unit property with three 2/1s and one 3/2. The appraiser added $6k for each of the three units in the triplex because they have an extra bathroom, but only subtracted $8,500 for the lack of extra rental unit! Clearly an extra house that rents for $1200/month has to be worth at least $155,000 due to his own monthy rent multiplier calculation.

Bringing better data and pointing out any internal inconsistencies like that is going to be the most effective way to address this.

Malcat

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Re: Incomprehensible appraisal value
« Reply #5 on: May 03, 2021, 10:49:48 PM »

Former commercial appraiser here. I never did single family homes but I know the basics. My first thought when looking at a property with four homes is that an investor is the most likely buyer. Not a lot of owner-occupants looking to buy four houses on a five-acre property unless it's going to be a family compound. If you're in a rural area, rental data and investment sales are probably going to be hard to come by so the sale of a 4-plex on a typical lot isn't completely unreasonable. 

The value of a half-acre of grape vines to an investor is basically zero. To an owner-occupant, it's probably worth something, but not much. If you've got a lot of unique amenities it's going to be very hard to determine the value of those from the market. Compare 10 similar houses that sold with pools to 10 that sold without and you can extract a range of values for how much a pool is worth. If you've got a pool, a huge outdoor kitchen, a shop building, etc. it becomes much harder to extract the value of all those extra features. Also, a buyer make look at that whole package of amenities and decide it's only worth a fraction of what they would cost to build because they only care about the shop building but not the pool or outdoor kitchen.


All that being said, contact your lender and point out what you think are errors and if possible, provide better data (try those Realtors who said it's worth $900k). That means closed sales of similar properties, i.e. rural properties with multiple homes. Don't try to contact the appraiser. You are not their client, the lender is. They have no relationship with you and have a duty to maintain confidentiality with their client. The appraiser may have done a shitty job, but it sounds like a fairly difficult property to appraise and the bank may have just hired the cheapest fastest appraiser out their with no regard for their experience.
Hmm, thanks for the advice. I guess it makes sense but is unfortunate. We'll probably just sell the place at this point. A lot of things don't make sense when valuing the property as an investment as well. For instance, one of the "comps" they pulled was a triplex with three 2/2 units. Ours is a four unit property with three 2/1s and one 3/2. The appraiser added $6k for each of the three units in the triplex because they have an extra bathroom, but only subtracted $8,500 for the lack of extra rental unit! Clearly an extra house that rents for $1200/month has to be worth at least $155,000 due to his own monthy rent multiplier calculation.

It's going to come down to whether or not you want to take on this fight.

Either the appraiser is off, or all of your realtors are off, or both.

Regardless, what matters is if you want to go through the energy of trying to make your case to the bank. This sounds like one of those persistence issues where you have to work your way through the resistance of the system to get a human being to make an exception for you.

I've done it a few times with banks when I was in an ongoing situation that was unreasonable. Every time it's been a case of an "I" being dotted and a "t" being crossed, and there's no mechanism in the system to fix it. Every time I've had to escalate it to the VP level where they, a human being, assess if what I've said makes sense, and then they override the system and make a big, loud deal about how much of an exception they're making for me.

Is your appraisal unreasonable? Yeah, sounds like it

Can you prove it definitively? Perhaps not

Can you generate compelling evidence? Yeah, sounds like it

Is it worth the hassle of butting up against a bureaucratic behemoth to get a chance to make your case based on your compelling, but not definitive evidence?
Hmm...that's up to you. Sounds like it might not be.

I wish I could tell you a simple approach to getting a thing like this dealt with, but my experience tells me that it doesn't exist.

MDM

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Re: Incomprehensible appraisal value
« Reply #6 on: May 04, 2021, 11:16:13 AM »
How does the appraisal on which your property taxes are based compare?

sailinlight

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Re: Incomprehensible appraisal value
« Reply #7 on: May 04, 2021, 11:45:53 AM »
How does the appraisal on which your property taxes are based compare?
It's in California, so property taxes work a little different here. The value used for assessment is the purchase price plus (I believe generally) 2% increase per year. However, if the appraiser stands by the value, I'm definitely going to use that for a basis in petitioning for a tax decrease.

clarkfan1979

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Re: Incomprehensible appraisal value
« Reply #8 on: May 04, 2021, 11:50:11 AM »
It's pretty easy to order a 2nd appraisal. My renters just bought a house. First appraisal came in 100K under sales price. They ordered a 2nd appraisal and it came in at sales price.

I refinanced a rental property in December 2020. It's worth 425K. Appraisal came back at 375K. I was bummed because a cash-out re-fi was no longer an option. I was going to go from 4.625% to 4% and pull out 50K. Instead I ended up doing a regular refinance and got 3.5%.

I got the county appraisal yesterday it the mail. The county appraised it as 412K, which is typically 10% under market value.


NathanP

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Re: Incomprehensible appraisal value
« Reply #9 on: May 04, 2021, 11:50:52 AM »
Would it be possible to divide the single plot into separate plots, one per housing unit? Perhaps single family homes in your area would appraise much higher assuming there are better comps. You also would gain the ability to sell a portion of the total plot as needed.

I suspect this may be difficult to do given your current loan situation, and it may trigger higher property taxes.

Jon Bon

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Re: Incomprehensible appraisal value
« Reply #10 on: May 06, 2021, 07:53:58 AM »
I am currently going through the same thing. It is indeed incomprehensible. My story is similar, bought a 10 bedroom duplex 5 years ago for 365k. Raised rent by $1200, installed 2 new bathrooms, added parking, new front doors and appliances. and the appraisal came back at 421k. Which is 3% a year, basically rate of inflation.

Well I pushed back HARD, and am still pushing back. So far no good. The bank keeps saying there is "nothing that they can(will) do". I don't believe this at all considering it was an inhouse appraiser anyways. Oh they also told me they would only lend up to 70%. On some level I think they are starting to act in bath faith.

I was thinking about the why here. Well its a cash out refinance. Is there an effort on the banks part to be more conservative? Do they have bed memories of 2008 and are kind of doing their own risk mitigation?

Has anyone purchased a house at "pandemic prices" and had trouble with the sale price being >> appraisal price?

Re: Second appraisal, they wont even do that. Kind of why I think the whole thing is bullshit. I mean I could list my house at the appraised price and have 5 offers by the end of the day, it just makes no sense.

Good luck to you, let us know how it turns out.




sailinlight

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Re: Incomprehensible appraisal value
« Reply #11 on: May 06, 2021, 08:45:55 AM »
I am currently going through the same thing. It is indeed incomprehensible. My story is similar, bought a 10 bedroom duplex 5 years ago for 365k. Raised rent by $1200, installed 2 new bathrooms, added parking, new front doors and appliances. and the appraisal came back at 421k. Which is 3% a year, basically rate of inflation.

Well I pushed back HARD, and am still pushing back. So far no good. The bank keeps saying there is "nothing that they can(will) do". I don't believe this at all considering it was an inhouse appraiser anyways. Oh they also told me they would only lend up to 70%. On some level I think they are starting to act in bath faith.

I was thinking about the why here. Well its a cash out refinance. Is there an effort on the banks part to be more conservative? Do they have bed memories of 2008 and are kind of doing their own risk mitigation?

Has anyone purchased a house at "pandemic prices" and had trouble with the sale price being >> appraisal price?

Re: Second appraisal, they wont even do that. Kind of why I think the whole thing is bullshit. I mean I could list my house at the appraised price and have 5 offers by the end of the day, it just makes no sense.

Good luck to you, let us know how it turns out.
Interesting, thanks for your story. It really does seem that banks hate cash out refis of non-owner occupied properties. I've been working on this for over 6 months with 5 different brokers and something always blows it up at the last minute.

uniwelder

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Re: Incomprehensible appraisal value
« Reply #12 on: May 06, 2021, 10:25:24 AM »
It really does seem that banks hate cash out refis of non-owner occupied properties. I've been working on this for over 6 months with 5 different brokers and something always blows it up at the last minute.

Have you tried with PenFed?  They will do HELOC's for non-owner occupied if you have 4 properties max, so cash out refinance may be possible too.  We did one with them after dealing with the bad experience described earlier in this thread.  It was so easy, but circumstances were much different than yours.  Ours was in a typical neighborhood with lots of other similar houses around.  They gave 70% LTV based on a drive-by appraisal, which seemed a pretty accurate value. 

Jon Bon

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Re: Incomprehensible appraisal value
« Reply #13 on: May 06, 2021, 11:19:59 AM »
The thing is they did a cash out for me in July on the same type property. So obviously something changed with Fannie/Freddie, what else could it be? I am richer and properties are more expensive than ever. Under that logic they should be more then happy to give me wheel barrels of cash.

When banks have to hold the loan and actually take the risk sounds like they get very conservative very fast!


joe189man

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Re: Incomprehensible appraisal value
« Reply #14 on: May 06, 2021, 11:49:01 AM »
i had a similar situation on my cash out refi, the appraisal came back way way low, i tried to counter the appraisal with the lenders form, the appraiser said show me the comps to increase your value, he didn't care about how the appraisal was incorrect in comparison or equivalency. he only wanted comparable neighborhood sales. i think, and this is a guess, but i think the appraiser folks have a different metric or grading system for cash out refi's to lower the price and protect the banks investments compared to new purchases. How else can someone get a mortgage for the crazy home prices on new purchases right now, a home down the street just sold for $200k+ more than my home appraised for around december/january of this year. i gave in and accepted the deal because it was that or pay for another appraisal and hope for a better result or take the ok deal. good luck

sailinlight

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Re: Incomprehensible appraisal value
« Reply #15 on: May 06, 2021, 01:09:46 PM »
It really does seem that banks hate cash out refis of non-owner occupied properties. I've been working on this for over 6 months with 5 different brokers and something always blows it up at the last minute.

Have you tried with PenFed?  They will do HELOC's for non-owner occupied if you have 4 properties max, so cash out refinance may be possible too
The problem is that anything would require another appraisal and chances are high I'll get this guy again! I heard from my realtor he's known for doing this and has ruined several of his other deals because of this. Not only that, coordinating all the tenants to schedule access is annoying and tiring for everyone. At this point I think we're just going to give up and work on splitting the lot to sell separately.

Dicey

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Re: Incomprehensible appraisal value
« Reply #16 on: May 09, 2021, 02:16:57 PM »
It really does seem that banks hate cash out refis of non-owner occupied properties. I've been working on this for over 6 months with 5 different brokers and something always blows it up at the last minute.

Have you tried with PenFed?  They will do HELOC's for non-owner occupied if you have 4 properties max, so cash out refinance may be possible too
The problem is that anything would require another appraisal and chances are high I'll get this guy again! I heard from my realtor he's known for doing this and has ruined several of his other deals because of this. Not only that, coordinating all the tenants to schedule access is annoying and tiring for everyone. At this point I think we're just going to give up and work on splitting the lot to sell separately.
Depending on the spacing/arrangement of the houses, this might be the best money play in the end.

Jon Bon

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Re: Incomprehensible appraisal value
« Reply #17 on: May 10, 2021, 05:27:18 PM »
My bank stood firm. Wont accept another appraisal under any circumstances. Apparently it has been anointed by god or something. I can't pay for a new one, data I send is obviously fake news, and the appraiser was valedictorian of her PHD appraisers class....

I really think the bank messed up on this one, my terms are too good and I think they are trying to kill the deal any way that they can.

Malcat

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Re: Incomprehensible appraisal value
« Reply #18 on: May 10, 2021, 06:52:59 PM »
My bank stood firm. Wont accept another appraisal under any circumstances. Apparently it has been anointed by god or something. I can't pay for a new one, data I send is obviously fake news, and the appraiser was valedictorian of her PHD appraisers class....

I really think the bank messed up on this one, my terms are too good and I think they are trying to kill the deal any way that they can.

As I said previously, just because the bank dictates something doesn't mean it can't be fought, it's just a matter of how much will you have to argue with them, and how crafty you are at escalating things. If it's not that important to you, then don't worry about it, but if you do choose to escalate, you need to escalate above your branch.

Jon Bon

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Re: Incomprehensible appraisal value
« Reply #19 on: May 10, 2021, 08:58:35 PM »
My bank stood firm. Wont accept another appraisal under any circumstances. Apparently it has been anointed by god or something. I can't pay for a new one, data I send is obviously fake news, and the appraiser was valedictorian of her PHD appraisers class....

I really think the bank messed up on this one, my terms are too good and I think they are trying to kill the deal any way that they can.

As I said previously, just because the bank dictates something doesn't mean it can't be fought, it's just a matter of how much will you have to argue with them, and how crafty you are at escalating things. If it's not that important to you, then don't worry about it, but if you do choose to escalate, you need to escalate above your branch.

Well I have pretty much figured out their org structure via linked in, and piecing together replies from emails. Its not hard to find people in the corporate office if you know how to speak the language. So I have spoken to a few vice presidents and pretty much been told to drop it or they are not going to process the loan. I have also sent their in house appraiser a few comps/data etc (literally 2 emails) and been told to stop that as well. Because somehow this is a threat to the  "independence" of the appraiser who is a captive employee of the bank.  I really I want to get a similar deal from a competing bank, then CC them all with the new appraisal, the middle finger may or may not be attached!

Spoke to a VP who is in the RE investment business as well, in so many words: "yes you could sell it for 600k I believe that for sure, but no we will only value it at 421k".




Dicey

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Re: Incomprehensible appraisal value
« Reply #20 on: May 10, 2021, 11:09:09 PM »
My bank stood firm. Wont accept another appraisal under any circumstances. Apparently it has been anointed by god or something. I can't pay for a new one, data I send is obviously fake news, and the appraiser was valedictorian of her PHD appraisers class....

I really think the bank messed up on this one, my terms are too good and I think they are trying to kill the deal any way that they can.

As I said previously, just because the bank dictates something doesn't mean it can't be fought, it's just a matter of how much will you have to argue with them, and how crafty you are at escalating things. If it's not that important to you, then don't worry about it, but if you do choose to escalate, you need to escalate above your branch.

Well I have pretty much figured out their org structure via linked in, and piecing together replies from emails. Its not hard to find people in the corporate office if you know how to speak the language. So I have spoken to a few vice presidents and pretty much been told to drop it or they are not going to process the loan. I have also sent their in house appraiser a few comps/data etc (literally 2 emails) and been told to stop that as well. Because somehow this is a threat to the  "independence" of the appraiser who is a captive employee of the bank.  I really I want to get a similar deal from a competing bank, then CC them all with the new appraisal, the middle finger may or may not be attached!

Spoke to a VP who is in the RE investment business as well, in so many words: "yes you could sell it for 600k I believe that for sure, but no we will only value it at 421k".
Dude, this is not worth losing a finger over!

Finances_With_Purpose

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Re: Incomprehensible appraisal value
« Reply #21 on: May 10, 2021, 11:51:32 PM »
It's a bank.  They may not win--by giving you as much loan as you want and then reaping the interest--but rates are at like 3%.  They just don't want to lose

The banker practically told you as much.  Sure, we could put it at $600k, but we want to stay at $420k, where it's a guaranteed win for us.  He's not looking to win; he's looking to make a buck and not lose.  Especially after 2008. 

Hell, the bank probably has deal-killer appraiser Bob there for that reason.  They don't want to take on appraisal risk (i.e. asset-price risk).  They want to bet on sure things.  And collect on them.  They're only making a point or two per year on these loans, so they sure as hell don't want to have even one of them turn up bad.  Nope. 

Your best bet is to really convince your lender to convince deal-killer Joe that your property is one of ten that sold for way more, or to give up and move on.  Go to another bank--there are more banks out there.  And God knows there's enough dumb money floating around right now.

You have a unique property so you'll have to work harder or find another way.  Maybe offer the next bank to pay for a separate appraiser if you don't like the results.  Something.  But fighting this directly isn't going to win you friends or get you a deal.  You're thinking about it rationally, but start thinking about it in terms of the bank's incentives...and they have very little incentive to move this for you. 

Jon Bon

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Re: Incomprehensible appraisal value
« Reply #22 on: May 11, 2021, 05:41:34 AM »
My bank stood firm. Wont accept another appraisal under any circumstances. Apparently it has been anointed by god or something. I can't pay for a new one, data I send is obviously fake news, and the appraiser was valedictorian of her PHD appraisers class....

I really think the bank messed up on this one, my terms are too good and I think they are trying to kill the deal any way that they can.

As I said previously, just because the bank dictates something doesn't mean it can't be fought, it's just a matter of how much will you have to argue with them, and how crafty you are at escalating things. If it's not that important to you, then don't worry about it, but if you do choose to escalate, you need to escalate above your branch.

Well I have pretty much figured out their org structure via linked in, and piecing together replies from emails. Its not hard to find people in the corporate office if you know how to speak the language. So I have spoken to a few vice presidents and pretty much been told to drop it or they are not going to process the loan. I have also sent their in house appraiser a few comps/data etc (literally 2 emails) and been told to stop that as well. Because somehow this is a threat to the  "independence" of the appraiser who is a captive employee of the bank.  I really I want to get a similar deal from a competing bank, then CC them all with the new appraisal, the middle finger may or may not be attached!

Spoke to a VP who is in the RE investment business as well, in so many words: "yes you could sell it for 600k I believe that for sure, but no we will only value it at 421k".
Dude, this is not worth losing a finger over!

Lol, nice!


norajean

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Re: Incomprehensible appraisal value
« Reply #23 on: May 11, 2021, 06:01:28 AM »
Getting appraisals changed after the fact is very difficult and is only evidence-based. You would need clear evidence the appraiser made a mistake, preferably in the form of multiple nearby recent sales of close comps. Otherwise you can scream up and down the ladder all day and nothing will change. At this stage all you can do is try another lender.

Jon Bon

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Re: Incomprehensible appraisal value
« Reply #24 on: May 11, 2021, 04:35:17 PM »
It's a bank.  They may not win--by giving you as much loan as you want and then reaping the interest--but rates are at like 3%.  They just don't want to lose

The banker practically told you as much.  Sure, we could put it at $600k, but we want to stay at $420k, where it's a guaranteed win for us.  He's not looking to win; he's looking to make a buck and not lose.  Especially after 2008. 

Hell, the bank probably has deal-killer appraiser Bob there for that reason.  They don't want to take on appraisal risk (i.e. asset-price risk).  They want to bet on sure things.  And collect on them.  They're only making a point or two per year on these loans, so they sure as hell don't want to have even one of them turn up bad.  Nope. 

Your best bet is to really convince your lender to convince deal-killer Joe that your property is one of ten that sold for way more, or to give up and move on.  Go to another bank--there are more banks out there.  And God knows there's enough dumb money floating around right now.

You have a unique property so you'll have to work harder or find another way.  Maybe offer the next bank to pay for a separate appraiser if you don't like the results.  Something.  But fighting this directly isn't going to win you friends or get you a deal.  You're thinking about it rationally, but start thinking about it in terms of the bank's incentives...and they have very little incentive to move this for you.

Appreciate the prospective.

I do a fair amount of business with these guys, so I was thinking they might move for me. This is apparently not the case.

Honestly I am having a hard time finding anyone that can get close. Other banks have told me that Fannie/Freddie no longer are interested in loans from investment properties so that means its a port loan, that means its commercial, and that means its expensive!

Ill keep looking around. I do agree there is a bunch of dumb money, but banks wont lend if they cant pass the buck directly to the big debt holders. My experience has been  banks are big machines, they really can only do 1 thing. Ask them to do anything that is not exactly like before and the wheels fall off in a hurry.




Finances_With_Purpose

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Re: Incomprehensible appraisal value
« Reply #25 on: May 11, 2021, 08:53:02 PM »
Very, very true.  In the end, you're in a tough spot because you have such a unique place, and everyone does cookie-cutter, conveyor-belt products/loans.  If you don't fit, nobody wants to pay to do real underwriting anymore.  They're just checking boxes off to sell these things to an even bigger fish for immediate fees.  And it's hard to swim against that current.   

Dicey

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Re: Incomprehensible appraisal value
« Reply #26 on: May 20, 2021, 09:56:15 PM »

sailinlight

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Re: Incomprehensible appraisal value
« Reply #27 on: May 21, 2021, 08:42:07 AM »
@sailinlight, I thought this might interest you. Nuts!

https://www.yahoo.com/news/black-homeowner-launches-legal-fight-145615953.html

That's interesting, thanks. I'm beginning to believe that residential real estate appraisal process is completely broken and even more of an outdated racket than realtors (:ducks:)
Magically, values always come back with the exact selling price when I've purchased or sold properties. It really just seems like they come up with a number upon first viewing a property and then find data to backfill into making it seem like it makes sense.

Dicey

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Re: Incomprehensible appraisal value
« Reply #28 on: May 21, 2021, 11:53:40 AM »
Yeah, I've never had a house come in over the purchase price, even when buying well below market. Strange.

Kudos to this woman for prevailing, but it totally sucks that she had to go through it.

ericrugiero

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Re: Incomprehensible appraisal value
« Reply #29 on: May 21, 2021, 12:53:38 PM »
You might check Churchhill mortgage.  I've never dealt with them but I've heard about them on the Ramsey show.  They do loans for people with no credit score by doing manual underwriting (looking at each person's financial situation individually).  That could mean they would be more willing to looking your unique situation from a different perspective vs just doing cookie cutter loans without thinking about them.