Bad Appraisal

[slappy]

Ok, just had my house appraised and I'm extremely upset as well as angry. I live in a fairly new development(10 years old). There are about 6 different models of houses in my development and all are comparable in square footage. There are anywhere from 6-10 houses currently for sale, all listed between 175,000 and 190,000. The appraiser gave me a value of 215,000. He didn't compare my house to any other house in the development, instead he used other developments. This has me very agrivated, as there is absolutely no possible way I could sell the place for more than 190,000. Most likely, if I had to sell tomorrow, it would go for 170,000--180,000. What is even more agrivating, is my attorney recommended this guy and said I would get a very solid appraisal done. Any suggestions on what to do? thanks

[lillaimof2kids]

Oh my! That sucks! How does it compare to your property value on your real estate tax?

[gophermn]

slappy, is your house the same as the others in your area? Like sq ft, # of rooms, bathrooms, etc? If not then I understand why they looked at other developments. I had a rental house that sat next to homes newly built so there was no way they could get comps.

I would ask the appraiser to get comps in the area - as they can redo their appraisal being 99% is done via computer. You have every right to be upset but keep in mind the appraiser might be working for you as the homes next to you might have lost value, hence bringing your value down.

A buddy from work had his house appraised and it came in LESS than it did 4yrs ago. His house is immaculate - spot clean. The market is odd.

[JRScott]

Dang sorry slappy, maybe a second opinion?

[PoorGrammyinBK7]

You could go to your county property appraisers office website and pull the info /past 6 months sales yourself. Some people use the tax assessment, but sometimes that is way off.

Also there is a website called www.zillow.com that will give you an "appraisal". Not always accurate, but I wil say the BANK used it to give us a HELOC - however, guess what - value has gone down $40K in 2 years!!!! Yikes!!

[slappy]

Yes, the other houses in my development that are up for sale are 3 bedroom/2 bath with approximately the same square footage. On the appraisal, he claims he used other houses in different developments, because my house is a ranch style and the ones for sale in my development are not. To me, that is a line of bs. If they have similar square footage and the same number of bedrooms and bathrooms, they are comparable to mine. I don't know what this guys agenda is, but 215,000 is way off. The tax value is 156,000 and like I said above, there are 6-10 houses currently for sale, all from 175,000--189,000. Also, could I get a second appraisal done and if it comes in lower use it, or now that this one has been done, do I have to use it? I've already called the appraiser and let him know I'm not happy and want an explanation as to why houses in my development were not used. On Monday I'll call my attorney and see what he says.

[Flamingo]

Home values have dropped about 25%. However, in some areas of the country, they have risen. This market is terrible for most. Did the appraiser know that you were getting an appraisal for BK purposes or to refinance? What is in your house that can raise it's value....special windows, bathroom fixtures, appliances, etc. and if your lot size is bigger, that can raise it's value. Also where it is located in your development might be a factor (corner lot). Many people prefer ranch homes and they are sometimes priced higher, especially if they are the same footage range or more as a two story house. A FROG (family room above garage) can really up a home's value.

Find out who did the appraisals on the homes for sale near you and maybe look into getting another opinion so you have an idea as to what went on as to your appraisal or just be direct and contact the appraiser directly who did the one on your house and ask! Never hurts! He was paid for his services!

[slappy]

Home values have dropped about 25%. However, in some areas of the country, they have risen. This market is terrible for most. Did the appraiser know that you were getting an appraisal for BK purposes or to refinance? What is in your house that can raise it's value....special windows, bathroom fixtures, appliances, etc. and if your lot size is bigger, that can raise it's value. Also where it is located in your development might be a factor (corner lot). Many people prefer ranch homes and they are sometimes priced higher, especially if they are the same footage range or more as a two story house. A FROG (family room above garage) can really up a home's value.

Find out who did the appraisals on the homes for sale near you and maybe look into getting another opinion so you have an idea as to what went on as to your appraisal or just be direct and contact the appraiser directly who did the one on your house and ask! Never hurts! He was paid for his services!

He knew it was for a bankruptcy. The only thing "special" he noted was a big deck and a finished basement. With that said, some of the houses in my development that are up for sale right now have finished basements. Home values have not gone up here, they have gone down over the last 2 years, just like the rest of the country. A style of house, such as a rancher, does not raise the value 20% compared to what the other houses in the development are selling for. As stated above, I already called the appraiser and let him know his work is completely unacceptable. To add insult to injury, he claims the house could sell at that price within 90 days. Two houses in the last 3 months took themselves off the market, because they couldn't sell and the rest are up for 175,000--190,000. This is just ridiculous and I'm about to pull my hair out. The house is only covered with exemptions up to 180,000 and this clown gives me an appraisal of 215,000 when houses are sitting at 175,000. I'm really at wits end right now.

[JRScott]

Find out who the realtor is on the others, and find out who they used to appraise it. Then I'd go with that one .

[Flamingo]

He knew it was for a bankruptcy. The only thing "special" he noted was a big deck and a finished basement. With that said, some of the houses in my development that are up for sale right now have finished basements. Home values have not gone up here, they have gone down over the last 2 years, just like the rest of the country. A style of house, such as a rancher, does not raise the value 20% compared to what the other houses in the development are selling for. As stated above, I already called the appraiser and let him know his work is completely unacceptable. To add insult to injury, he claims the house could sell at that price within 90 days. Two houses in the last 3 months took themselves off the market, because they couldn't sell and the rest are up for 175,000--190,000. This is just ridiculous and I'm about to pull my hair out. The house is only covered with exemptions up to 180,000 and this clown gives me an appraisal of 215,000 when houses are sitting at 175,000. I'm really at wits end right now.

The only thing you can do right now is to (as I suggested in my previous posting) is to find out who did the appraisals on the other houses for sale in your development and then if you can swing it, get another appraisal. Unless there is something the appraiser knows that you don't know that is raising the price of your house over the others in your development. They know the market and follow certain strategies for the market in your area. They do go with comparable houses in nearby developments (they did with ours also) for appraisals so if yours is the only ranch in that development and has a large deck and finished basement, he is using the proper tools to value your home. As with doctors and second opinions, you can always get a second appraisal.

[slappy]

The only thing you can do right now is to (as I suggested in my previous posting) is to find out who did the appraisals on the other houses for sale in your development and then if you can swing it, get another appraisal. Unless there is something the appraiser knows that you don't know that is raising the price of your house over the others in your development. They know the market and follow certain strategies for the market in your area. They do go with comparable houses in nearby developments (they did with ours also) for appraisals so if yours is the only ranch in that development and has a large deck and finished basement, he is using the proper tools to value your home. As with doctors and second opinions, you can always get a second appraisal.

There are a bunch of ranchers in my development, mine is not the only one. Again, a style of house, whether it be a colonial, bi-level, two story or rancher does not raise the value 20% over the other houses in the development. There have been at least 5 houses sold in my development since last September ranging from 156,000--200,000. Three of those have 4 bedrooms and 2.5 baths. Mine is only 3 bedrooms/2 baths. I've already spoken with a friend who just put his realtor's license in escrow because the market is so bad and he said, without a doubt the guy did not do a proper job. I have no choice but to speak with my attorney and see what he says and I'll probably have to get a second appraisal. The only question I have is, does the first appraisal have any effect on my bankruptcy is I get a second one done and it's lower?

[ThreadsSnapping]

If yours is a 3/2 then it should be compared to other 3/2 homes before it will be compared to a 4/2.5. They are not the same thing. And a one story house should be compared to a one story house. Exterior style of the house doesn't always make a big difference, but how many floors it has makes a big difference in price even with all other things being comprable. Ranchers go for more money in my area, and it can be a considerable difference, yes, even 20% more. Lots of people don't want the hassle of dealing with the steps in a two story home.
And when did the houses in your development sell? It doesn't matter what the houses are on the market for now, what did they sell for? What was the final price after all the paperwork was signed, sealed and delivered? Are they recent, within the past 3 months, or further out? The closer they are to the present the more accurate the value.
The appraisal might not be to your liking but it may be a good appraisal. You're only option might be a second appraisal if you don't like his appraisal and explanation.

TS

[slappy]

If yours is a 3/2 then it should be compared to other 3/2 homes before it will be compared to a 4/2.5. They are not the same thing. And a one story house should be compared to a one story house. Exterior style of the house doesn't always make a big difference, but how many floors it has makes a big difference in price even with all other things being comprable. Ranchers go for more money in my area, and it can be a considerable difference, yes, even 20% more. Lots of people don't want the hassle of dealing with the steps in a two story home.
And when did the houses in your development sell? It doesn't matter what the houses are on the market for now, what did they sell for? What was the final price after all the paperwork was signed, sealed and delivered? Are they recent, within the past 3 months, or further out? The closer they are to the present the more accurate the value.
The appraisal might not be to your liking but it may be a good appraisal. You're only option might be a second appraisal if you don't like his appraisal and explanation.

TS

Don't know where you live, but I can assure you ranchers in my area do not go for 20% more than other styles. Maybe a few percentage points more(2-4) if that, but certainly no where near 20%. The actual selling prices of the houses that have sold are 160,000--200,000 and yes there are plenty of 3 bedroom/2 bath houses that have sold. There are at least 6 that have sold since last September, at least 3 since April of this year. The dates of sale for the comparables that he used are 10/30/2007, 7/30/2007 and 4/30/2008. There are currently a minimum of 8 for sale right now, all for 170,000--197,000. Several that are bigger than mine. I was simply pointing out that houses with more bedrooms and more bathrooms have sold for far less than the 215,000 he slapped on my house. Within the last 5 months, 2 houses right up the street from me have been pulled off the market, because they couldn't sell and they were using the same realty company as the appraiser was from. I know what I'm talking about, I've checked around. There was plenty of comparisons to be done in my development, instead of newer developments where houses are selling for more. Some of you are acting like I'm a moron and have know idea what I'm talking about. Again, I've checked many, many houses in my area and none are going for the price he gave. As a matter of fact, it isn't even close.

[slappy]

Well yes it actually can if they are limited in number of ranch homes for sale and similar in sqft. It cost more per sqft to build a ranch than it does a two story house on the same lot. Second, ranch or single level homes or a ranch with a basement are much more desirable homes to people that don't want or can not climb stairs. So the appraisal may not be that far off. You really need sales date from other ranch or single story homes to be comparable. You can not compare a ranch to a split level, two story or more. You get the most bang for your buck with a split level home. More usable sqft per $.

There are not a "limited" number of ranchers for sale and in my development(again I don't know where you live) a colonial style house was actually the most expensive to build, not a ranch. As a matter of fact, my house was in the middle of the 5 models available as far as cost to build. I've been here since the development started 10 years ago, so I've had the ability to see what the increases have been for all the styles. Colonial style houses go for more and normally sell quicker than the other models here. Why, I have no idea, but I do know that none of them are selling for over 200,000 no matter what model they are. Oh, and we have split levels as well, however they do not sell very well here. We do have what some call a raised rancher or two story(1st floor and basement are above ground) and one of those models was more expensive to build than mine was. Doesn't really seem like that is very different from my place, except my basement is 1/2 underground.
Again, I spoke to someone who just put their real estate lisence in escrow due to the bad market and he said it was a horrible job. You can't compare a rancher in one developement where houses are selling for 160,000-200,000 to a rancher in another development where the houses are selling for 200,000--275,000, unless there is some type of adjustment made for the houses selling for less in the first development, which he did not do. The other developments this guy used as comparables are more upscale and the houses cost more to build. Hell, there are still a few lots in my development for sale and you can build a rancher new for less than the 215,000 he appraised my house at. Now with all this said, if someone still thinks this guy did a proper job than either I'm not explaining things properly or people just want to argue. Again I will pose the question, can I get a second appraisal and not have the first appraisal affect anything? Any help would be appreciated. Thanks

[slappy]

Find out who the realtor is on the others, and find out who they used to appraise it. Then I'd go with that one .

JR, thanks for this idea. This is most likely what I'll be doing. Can I get a second appraisal done and simply use it, or will the first appraisal affect anything?