Appraisal sadness

Questions, answers and advice for people who own or work on houses built during the 20th century.

Moderators: oldhouse, TinaB, Don M, Schag

Kansas. 1911.
Posts: 848
Joined: Sun Mar 22, 2009 4:56 pm
Location: Junction City

Appraisal sadness

Post by Kansas. 1911. »

Is this a good place to come for sympathy? I hope so.

We had our house appraised after being here four years, and documenting $80,000 of work not counting sweat equity. The house appraises at $5,000 over what it did the day we bought it. We are so bummed.

We knew things weren't looking good when the appraiser didn't have any questions. I even gave him a list of the big upgrades that might not be apparent to the eye. He did not even walk around the house---snapped shots from across the street, came inside, drove around to the alley where he snapped one last shot, and drove off.

In 2006 we bought at the height of the market. The house appraised for $155,000. Today, it appraises for $160,000. I made a special mention of the fact that the records were off: records show it was built in 1924. I showed him two historical society documents verifying it's a 1911 and asked him to make certain the record was corrected. Sure enough, we have another appraisal listing it as a 1924 house. This just shows that he was rushing.

We were $12,000 away from the appraisal we needed to be able to refinance at 4.75% at our bank. Our credit scores are over 800. Our banker is going to work with us. Or, we can just say, "Bah," and walk away having paid for just a lousy appraisal. Any advice on fighting an appraisal?
American Foursquare with Prairie and Colonial Revival influences

ImageImage

Abuela
Posts: 2348
Joined: Sun Feb 26, 2006 12:29 am
Location: Georgetown, DE
Contact:

Re: Appraisal sadness

Post by Abuela »

I hear you. I have had to fight the last two appraisals that we had done, and I won both fights. The first time, I fought on the basis of the comps that they used -- since there were so few houses that had sold in our little town, I pushed for them to consider houses outside of their normal distance requirement and/or sales time period. The second time I fought on both factual errors (he didn't factor in that we have a garage!) and on definitions of living space and bedrooms -- he counted a first floor room as an office when it qualified as a bedroom, he wasn't counting in the finished attic space in the square footage because of the proportion of slanted ceiling space and because the closets were just outside and not inside the rooms, but won this based on finding out that the county tax assessors considered the third floor rooms to be bedrooms.

It's all about the comps. Look over his comparison of your houses to the comp houses in very careful detail. Figure out where there are real differences that are likely to matter to a seller.

Also, if you don't think that he used appropriate comps you can find your own comps (a lot easier if you know someone in real estate) and go from there.

Good luck.
"Finished" is all a state of mind. ~Angolito

People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” -Maya Angelou

My house journal: http://retrovation.blogspot.com/

Igloochic
Posts: 629
Joined: Tue Sep 29, 2009 7:16 pm

Re: Appraisal sadness

Post by Igloochic »

Couple of things...the advice in the last post is perfect so take that. Review the comps. Are they appropriate.

Then the second, the appraisor has to go on county records. He can't change those, that's up to you, which is why it's listed as a 1924 in the appraisal. He actually would not have been doing his job if the appraisal listed the date earlier than the gov records. But either way, I'm not sure that would have raised the value any given we're only talking about a few years difference.

What type of changes did you make? A new kitchen will garner a higher value. A new furnace and duct work, yes it should, but unfortuantely it really rarely does. Appraisals are done assuming mechanicals are done. Normally you only see a difference on the low side for that stuff after you prove they haven't been done, which then allows for the raise in value after the work is completed.

All that said, you are not obligated to accept the appraisal as final. You can ask the bank for a second appraisal. If the appraisal is not factual you can protest paying for it, but I'm not seeing you say that aside from the date and I covered that isssue. The worst thing you can do is pay for two appraisals :( BUt it gives you a chance at an appraisor who might be a bit more thorough.

I've protested appraisals many times and been successful but I'm a banker and used to manage the compliance devision of a mortgage dept so I know my in's and out's to look for errors. Even so, only glaring errors are going to get you off the hook for paying for a second opinion appraisal.
The James House - 1889 "Modern" Queen Anne
Image

matchbookhouse
Posts: 613
Joined: Thu Mar 05, 2009 1:59 pm
Location: Greater downtown Dahlgren, VA

Re: Appraisal sadness

Post by matchbookhouse »

I honestly don't think they really care about all of the upgrades a homeowner makes, unless they increase square footage or "conform" with the generally accepted housing "norms". I just refinanced my house as well to shorten the loan term to 15 years as well as drop the interest rate, and I think that correcting the house's age from 1950, as was previously listed, to 1927 actually reduced the value. Fortunately it was enough to cover the new loan. I agree with the previous posters though; challenging the appraisal is not uncommon, especially if you can find better comps. Maybe you can check the recent real estate sales in the local paper or the local circuit court clerk's office. They are often a good source of free info.

S Melissa
Posts: 6339
Joined: Fri Jun 30, 2006 6:15 pm
Location: Canton Michigan
Contact:

Re: Appraisal sadness

Post by S Melissa »

Old houses are notoriously hard to appraise mostly because so few good comps, and in this housing market, any of the comps of somewhat recent sales would have also been depressed. I suppose you can look at it this way - yes, you've literally "lost" $70K of value in your house - but so has everyone else! If you'd not done the work - the drop in vallue might have been just as steep - although Iggy makes a good point - the mechanicals type things are considered "maintenance" and of course they have to be replaced when they go - a "NEW" kitchen - now that's adding to the "bling" of sellling a house.

I have a worsening memory with each birthday - but I can CLEARLY REMEMBER when our house was appraised and the appraiser came in at a stupidly low number - no good comps - and I was PO'd big time!! Especially when the neighbor with a far smaller and really beat up nasty little house with a nasty little yard was appraised at $40K higher than I had been. My appraiser said our house was "obselete." good thing the appraisal was mailed - he'd have lost his face! I think I would've taken having him say I had ugly kids or that I was stupid easier than him saying my house was "obslete!" Nerve of the guy.

so, hopefully with your great CR and perhaps another appraiser that LIKES OLD HOUSes maybe you can pull the deal together!.. I do think that some appraisers are just not savvy about old houses - like inspectors - they just "dont get them."
Melissa
Canton, MI
1860 Italianate - Reuben Huston Home
Image

Kansas. 1911.
Posts: 848
Joined: Sun Mar 22, 2009 4:56 pm
Location: Junction City

Re: Appraisal sadness

Post by Kansas. 1911. »

Thank you, ladies,

I am trying to follow all the good advice.

Today, the local appraiser and I had a good chat. She was appropriately appalled, as was I, as to the comps that were pulled. The local appraiser now sells real estate has been in EVERY house including ours before and after we did the work, whereas the out-of-town appraiser (a guy) that did the appraisal just looked at photos on-line. What he judged as "good," she rated as "average" at best. He pulled 6 houses, and she tossed 4, and kept 2. Then she gave me two more.

The problem with all these is that the guy was pulling bungalows to compare with a 4-square, and leaving two-story houses behind. Same neighborhood, comparable age, and all needing repair, except ours.

We have a new kitchen w/ Silestone counters and up the backsplash, vegetable sink, all new bathrooms, refinished hardwoods, new paint on every square inch--in other words, we've done every surface plus added a couple energy upgrades (tankless gas water heater, gas stove as a fireplace insert). The guy didn't even find a comp with a fireplace.

My point of argument is that a 2-story has an attic for expansion, whereas a 1 1/2 story has reached its potential. We have full 9' ceilings on the second floor, whereas the 1/2 stories can only count the space higher than 5'.

We have a finished attic and basement, and absolutely none of the comps (out of 8) had that. The below-ground and unheated spaces don't get you any "brownie points." boo, hiss.

Tomorrow I'll take the two new comps to the banker--he asked for them--and we'll see if he can do anything. The new comps are great--one sold for 90K above our appraised value, and the other sold for 18K above our estimate. They are true comps, according to my person in real estate.

I'll also make a trip to the county appraiser and try to have the date changed, and a few other things that should be changed.

Any more suggestions?
American Foursquare with Prairie and Colonial Revival influences

ImageImage

rogerhennjr77
Posts: 1
Joined: Mon Jul 12, 2010 8:18 pm

Re: Appraisal sadness

Post by rogerhennjr77 »

We Have a Kolher 1952 Cast Iron Claw tube it doesnt have the claw it is the ball feet. We are going to post it for sale it is still in good shape. I am wanting to know what would the ask price for it. I have no clue what it is worth.

Kansas. 1911.
Posts: 848
Joined: Sun Mar 22, 2009 4:56 pm
Location: Junction City

Re: Appraisal sadness

Post by Kansas. 1911. »

Roger, that doesn't make sense.

___
Anyway, my banker is going to ask that two new comps be taken into the mix, and we'll see how that goes.
The county appraiser was agreeable to having discrepancies changed so now our house is recorded at its correct year of build--1911. And if we put in an egress window, we'd have a legal fourth bedroom which would quickly help us in the comps.

I've spent parts of the last three days stripping wallpaper from our basement apartment. Guests are coming, and you know how motivating that can be. At least we have a deadline for the next go-round of home improvement--when the guests need their place to sleep.
American Foursquare with Prairie and Colonial Revival influences

ImageImage

oldhouseluvr
Posts: 2977
Joined: Sun Mar 05, 2006 10:52 pm
Location: Boothwyn, PA
Contact:

Re: Appraisal sadness

Post by oldhouseluvr »

My only thoughts are to keep in mind total square footage of living space and whether or not there are any exterior buildings that can be added to the value of your home. Does AC count, if you have it? Just my $0.02. :)

Igloochic
Posts: 629
Joined: Tue Sep 29, 2009 7:16 pm

Re: Appraisal sadness

Post by Igloochic »

OK I don't want to burst your bubble, but I want to see if I can at least give you some good info on what you've posted:
Today, the local appraiser and I had a good chat. She was appropriately appalled, as was I, as to the comps that were pulled. The local appraiser now sells real estate has been in EVERY house including ours before and after we did the work, whereas the out-of-town appraiser (a guy) that did the appraisal just looked at photos on-line. What he judged as "good," she rated as "average" at best. He pulled 6 houses, and she tossed 4, and kept 2. Then she gave me two more.
I got lost here...you had it appraised again by a local? At first I thought good, then I read on and wondered because you wouldn't see a professional appraisor dising someone elses work normally (not a good one anyhoo) and they wouldn't want to see that appraisal as to not be influanced by it. Why did she "toss" 4? and then give you two more? The overall rating of the house, poor average etc, does not matter. There is an adjustment for that. But more importantly, why is one over the other? Did she adjust each line item? That's the only way that it's going to matter to the bank. They have rules to follow as well and the local real estate agent is the LAST person they'll call for help.
The problem with all these is that the guy was pulling bungalows to compare with a 4-square, and leaving two-story houses behind. Same neighborhood, comparable age, and all needing repair, except ours.

Style of house does not matter. Yes if two story homes of similar age are available within reason they shoudld be compared, but the style is absolutely NOT a factor in appraising a home or in comps. When were the other ones sold? They're looking at six monts out now if possible.
We have a new kitchen w/ Silestone counters and up the backsplash, vegetable sink, all new bathrooms, refinished hardwoods, new paint on every square inch--in other words, we've done every surface plus added a couple energy upgrades (tankless gas water heater, gas stove as a fireplace insert). The guy didn't even find a comp with a fireplace.
The number of baths you have adds value, so those are compared to the comps. The quality of materials is factored in when comparing the comps. Silestone is not necessarily an upgrade or downgrade, it's just a counter and would be considered an average finish to above average. But when it comes to kitchens it's the overall finishes and kitchen materials that determine the value as a whole. Refinished vereses gouged and awful hardwoods are not an upgrade as both are wood floors and there would not be a material difference in the value on an appraisal. A fireplace in a comp is absolutely not necessary as they adjust up or down for them. Adding the stove to your fireplace is not necessarily an upgrade, and in many places it's a downgrade to a working fireplace.

Values for finished spaces above and below ground vary depending on the rules in your state. Basements are rarely included. Mine is lovely, and not worth a dime .

Your theory about the 1 1/2 to 2 story home is nice, but not a variable in the appraisla as that is factored into the value overall. Not everyone wants a two story nor does everyone want a one story. The values to adjust are specific in each area depending on how one or the other sells.

All in all, your banker can't make the other appraisor adjust their appraisal and likely they won't. Even if there were gross inaccuracies they wouldn't likely do it, but the bank would use that for justification for another appraisal. If your banker is telling you they're giving your comps to the old apparaisor I hate to tell you...but they can't influance the appraisal like this. It's not allowed both by the bank and by the appraisal standards. You probably have a less than well educated banker (which is normal in mortgage lending unfortunately). I would have beat the hell out of a lender who would give you info like this one is passing on...if not fire them for it. To indicate to a client that the bank can adjust the appraisal is a violation of the mortgage regulations. Instead they can point out the issues you see to their appraisal review board/people and another appraisal can be ordered at your cost or theirs depending on the level of inaccuracies. In this case, sadly I'm sorry to say, I'd make you pay for the additional appraisal if it were my call. :( Sorry, really, I'm trying to be fair and give you good information verses blowing up your skirt...or pants or whatever :)

Get another real appraisal :) That's your best bet here and then hope the bank will take that one over this one.
The James House - 1889 "Modern" Queen Anne
Image

Post Reply