NoleSkin21 Posted March 31, 2011 Share Posted March 31, 2011 So, we are doing a renovation loan. We're paying someone 45k to put on a garage and increase the size of our family room. We had an appraiser come out and appraised our house at 275k (after renovation). Then 2 weeks later, we changed the format of our loan and needed to have another appraiser come out and they appraised it 22k lower than the first appraiser. The loan folks then asked the appraiser for an "as is" value which all she did was subtract the 45k from the after renovation value. Which dropped us lower than the amount we needed to close the loan. This is ridiculous, and there is no such thing as dollar to dollar home improvements. We sent her appraisal to a review committee and she is not backing down, b/c now she is pissed that we questioned her work. For you loan folks out there.....Is there anything I can do? B/c now, without 19k cash, we can't close the loan. Link to comment Share on other sites More sharing options...
Skinz4Life12 Posted March 31, 2011 Share Posted March 31, 2011 can you hire your own appraiser to come and give you a 3rd appraisal? Link to comment Share on other sites More sharing options...
NoleSkin21 Posted March 31, 2011 Author Share Posted March 31, 2011 The loan folks said we can't do that. That was my solution too. This lady comp'd my house which is 8 years old, to a 70 year old house. Link to comment Share on other sites More sharing options...
The 12th Commandment Posted March 31, 2011 Share Posted March 31, 2011 You guys see the potential for conflict there, don't you? The appraiser is an advocate for the property not the client. Their duty is to report a value (be it as-is or subject to or a number of other potential values) for a specific purpose. They are a part of the transaction who is removed from any benefit as to a direction in value. That has to be. We saw what happens when that isn't so, in both the current crisis and the S&L crisis. I was one for a long time until it got to the point where banks wouldn't use me because clients like you complained. Everyone is better served if a true reporting of a properties value is the basis for a transaction. There could be a number of reasons why they made you get another appraisal, did you loan company find a different investor for the second type of loan? Possibly they don't use that first appraiser. Link to comment Share on other sites More sharing options...
NoleSkin21 Posted March 31, 2011 Author Share Posted March 31, 2011 I'm complaining because there is no such thing as dollar to dollar home improvements. The 45k we are putting into the house should only increase the value of the house by 25k b/c 20k of the amount is labor etc. How can labor costs increase the house value? For her to subtract 45k from the finished product is just laziness. That is my main complaint. Link to comment Share on other sites More sharing options...
The 12th Commandment Posted March 31, 2011 Share Posted March 31, 2011 Any appraiser is going to know that, even the worst one. The board you complained to will know that also, and I imagine you might have started something if it's all as you say. She should have looked at the house as is, and it should be worth what it was worth with the proposed improvement, less that improvements contribution to the value. What you have to consider is perhaps the improvement led to the selection of a different type of comparable. If it involved making the total square footage of your house bigger then it's possible the first appraiser used comparables from another neighborhood that features larger houses that may sell for more per square foot. Link to comment Share on other sites More sharing options...
NoleSkin21 Posted March 31, 2011 Author Share Posted March 31, 2011 I know any appraiser should know that but not her. Yes, but the board said her call is the final call even though they disagree with her. She said she is "sticking to her guns". The improvements did lead to a different type of comps which the first appraiser also took into account and come out with a 22k higher appraisal. ---------- Post added March-31st-2011 at 05:05 PM ---------- I did email the appraiser, and she is kindly going to look at the first appraisal that was 22k higher than hers. Hopefully she adjusts her appraisal for us. Link to comment Share on other sites More sharing options...
The 12th Commandment Posted March 31, 2011 Share Posted March 31, 2011 I know any appraiser should know that but not her. Yes, but the board said her call is the final call even though they disagree with her. She said she is "sticking to her guns". The improvements did lead to a different type of comps which the first appraiser also took into account and come out with a 22k higher appraisal.---------- Post added March-31st-2011 at 05:05 PM ---------- I did email the appraiser, and she is kindly going to look at the first appraisal that was 22k higher than hers. Hopefully she adjusts her appraisal for us. Man, best of luck to you and the old cliche is true, more flies with honey. You want your appraiser to stick to their guns, but you want them to know their weapon. Licensing back after the S&L Crisis did the exact opposite of what you would have thought. It took a system where private organizations created a ranking criteria (by virtue of those cute little letters behind your name) for appraisers, that you worked for as an appraiser and that lenders understood as an indication of your level of competency as judged by experts in your own field. Human weakness came into play though, and the few bad apples spoiled it for everybody from then on. There was a poor job done on the legislation that produced the appraisal licensing structure. Licensing has allowed the most inept idiots to be seen as qualified appraisers. I was fully certified and to do commercial work you still have to know you **** but the residential guys quit caring in the mid nineties and it went to ****. I went back to college and changed careers in '97 and you could ask of my friends why and they would tell you I called the residential mess a long time ago. Link to comment Share on other sites More sharing options...
MKnight82 Posted March 31, 2011 Share Posted March 31, 2011 can you hire your own appraiser to come and give you a 3rd appraisal? No that wouldn't help an appraiser must be hired by the client (the bank) as a requirement of USPAP and FIRREA. It would be a waste of money.---------- Post added March-31st-2011 at 07:38 PM ---------- I'm complaining because there is no such thing as dollar to dollar home improvements. The 45k we are putting into the house should only increase the value of the house by 25k b/c 20k of the amount is labor etc. How can labor costs increase the house value? For her to subtract 45k from the finished product is just laziness. That is my main complaint. You are correct. Cost does not equal value. The appraiser needs to compare your house "as is" to homes in similar condition. Separate comparables should be used and a new Sales Comparison Approach developed.---------- Post added March-31st-2011 at 07:43 PM ---------- Man, best of luck to you and the old cliche is true, more flies with honey. You want your appraiser to stick to their guns, but you want them to know their weapon. Licensing back after the S&L Crisis did the exact opposite of what you would have thought. It took a system where private organizations created a ranking criteria (by virtue of those cute little letters behind your name) for appraisers, that you worked for as an appraiser and that lenders understood as an indication of your level of competency as judged by experts in your own field. Human weakness came into play though, and the few bad apples spoiled it for everybody from then on. There was a poor job done on the legislation that produced the appraisal licensing structure. Licensing has allowed the most inept idiots to be seen as qualified appraisers. I was fully certified and to do commercial work you still have to know you **** but the residential guys quit caring in the mid nineties and it went to ****. I went back to college and changed careers in '97 and you could ask of my friends why and they would tell you I called the residential mess a long time ago. With any profession there are bad apples. However, you can't blame it all on appraisers. Banks could hire the most experienced and qualified appraisers for there valuations but they don't want to pay for them. Inexperienced appraisers generate business by offering to do appraisals cheaper and faster. You get what you pay for. Link to comment Share on other sites More sharing options...
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