Posted on: 23rd Jun, 2009 01:39 pm
the appraisal done before purchasing the home had it listed as a 3 bedroom/ 2.5 bath (6 room) home. it used similar mls listings for comparable homes and had it appraised for 440k.
although there are 4 total bedrooms in the home, it had a 2 person septic tank. according to town hall, the maximum number of bedrooms has to be 1+septic capacity. i upgraded the septic to a 4 person and town hall now lists my home as a 4 bedroom.
fast forward to the present... i am in the middle of trying to refinance and the appraisal came way under (385k). it has the home listed as a 2 bedroom/1.5 bath (4 room) home because they do not count any below grade rooms. according to the loan processor, this is what the original appraisal and mls listing should have shown.
i am trying to determine if anyone was negligent here...
kirk
although there are 4 total bedrooms in the home, it had a 2 person septic tank. according to town hall, the maximum number of bedrooms has to be 1+septic capacity. i upgraded the septic to a 4 person and town hall now lists my home as a 4 bedroom.
fast forward to the present... i am in the middle of trying to refinance and the appraisal came way under (385k). it has the home listed as a 2 bedroom/1.5 bath (4 room) home because they do not count any below grade rooms. according to the loan processor, this is what the original appraisal and mls listing should have shown.
i am trying to determine if anyone was negligent here...
kirk
seems like the original appraisal you cited was inaccurate.
If the original appraisal was inaccurate, what are my options? Obviously, the bank does not care. They recommended contacting the Appraisal board or the like. Maybe you have better info on my options. I did contact the lawyer that closed on the purchase. I have not heard back yet. I am surprised that they did not notice the problem... Is this a common occurrence? Is anyone liable for this mistake?
kg3d,
we are seeing increase in these kinds of queries now days because most of the people are paying for mortgage and the actual value of their home is far less than what they owe.
here neither bank can do anything nor your lawyer. but surely you can get it doe through the appraisal board.Bank will just take a final word of the appraisal officer.
even if you go for reappraisal I think it will not make a big difference in terms of property valuation. so just request those officials from appraisal board to consider the changes of your home .
keep in touch........
we are seeing increase in these kinds of queries now days because most of the people are paying for mortgage and the actual value of their home is far less than what they owe.
here neither bank can do anything nor your lawyer. but surely you can get it doe through the appraisal board.Bank will just take a final word of the appraisal officer.
even if you go for reappraisal I think it will not make a big difference in terms of property valuation. so just request those officials from appraisal board to consider the changes of your home .
keep in touch........
Hi
To Guest,
There are not too many options with you. There is no point in filing a case against the previous appraiser as it would cost you both money and time. What you can do now is, you can have another appraisal on the property by a different appraiser. If he appraises the house at a price which is not too different from the second appraisal, it would mean that the current appraisals are accurate. If the third appraisal shows a higher value for the house, it would mean the second appraisal was not correct. You can then contact another lender. They may be able to offer you a higher loan amount for your house.
To Guest,
There are not too many options with you. There is no point in filing a case against the previous appraiser as it would cost you both money and time. What you can do now is, you can have another appraisal on the property by a different appraiser. If he appraises the house at a price which is not too different from the second appraisal, it would mean that the current appraisals are accurate. If the third appraisal shows a higher value for the house, it would mean the second appraisal was not correct. You can then contact another lender. They may be able to offer you a higher loan amount for your house.
but of course, if you choose the last option, you will then have paid for 3 appraisals. and of course, if you don't like the third, you can opt for a fourth.
at what point do you cave in? i honestly don't think it's wise to throw more money at what you perceive to be the problem. appraisers make mistakes, but they're professionals and not fools. the overall real estate marketplace has made tons of homeowners unhappy with their appraised values - it's the market, not the appraiser.
at what point do you cave in? i honestly don't think it's wise to throw more money at what you perceive to be the problem. appraisers make mistakes, but they're professionals and not fools. the overall real estate marketplace has made tons of homeowners unhappy with their appraised values - it's the market, not the appraiser.
Good point George.
I will also add that distiguishing above grade vs below grade could be irrelevant as long as it was explained and it has relative consistancy with similar properties. For example, it is very common for some split foyer homes in a development to be fully above grade while others of the exact same floorplan have part of the lower level below grade. Are they any different? Not at all. So as long as a consistency is maintained, the market value will be the same regardless of how the appraiser breaks it down.
On another note, the difference in value could be contributed more to the decline in property values depending on the length of time between the two appraisals. If you are truly curious about the validity of the previous appraisal, instead of having another appraisal done, have a review completed on the previous appraisal. Another appraiser can view the previous appraisal and let you know if there is any significant inaccurate data as well as provide you with any difference in value opinion as of the same date as the previous appraisal.
I will also add that distiguishing above grade vs below grade could be irrelevant as long as it was explained and it has relative consistancy with similar properties. For example, it is very common for some split foyer homes in a development to be fully above grade while others of the exact same floorplan have part of the lower level below grade. Are they any different? Not at all. So as long as a consistency is maintained, the market value will be the same regardless of how the appraiser breaks it down.
On another note, the difference in value could be contributed more to the decline in property values depending on the length of time between the two appraisals. If you are truly curious about the validity of the previous appraisal, instead of having another appraisal done, have a review completed on the previous appraisal. Another appraiser can view the previous appraisal and let you know if there is any significant inaccurate data as well as provide you with any difference in value opinion as of the same date as the previous appraisal.
Thank you for all the responses. Considering I need to wrap things up within 2 weeks, Im going to let it go and follow up with the Appraisal board and Town Hall (who is taxing me for a 4 bedroom).
Now I need to determine if refinancing is really in my best interest.
My original goal was to refi my 1st and 2nd into one mortgage. Unfortunately, because of the Loan to Value ratio... this cannot happen. So, according to my bank, my only option is to refi the first (from 6.3 to 4.5) and subordinate the second. In the end, my monthly savings will be aprox $150.00 for about 11k due at closing.
The most unfortunate thing is that because my first loan was sold, apparently I do not qualify for the Obama plan. Before I pull the trigger on this refi, can anyone confirm that this is true?
Now I need to determine if refinancing is really in my best interest.
My original goal was to refi my 1st and 2nd into one mortgage. Unfortunately, because of the Loan to Value ratio... this cannot happen. So, according to my bank, my only option is to refi the first (from 6.3 to 4.5) and subordinate the second. In the end, my monthly savings will be aprox $150.00 for about 11k due at closing.
The most unfortunate thing is that because my first loan was sold, apparently I do not qualify for the Obama plan. Before I pull the trigger on this refi, can anyone confirm that this is true?
Kg, you are the poster child for HVCC. These initials are probably Greek to you but they are the bane of current broker wrath.
I am SURE this didnt happen in your case but THEORITICALLY the appraisal on your original purchase transaction might POSSIBLY (although assuredly not) been to show as a 4 BR. Below grade is a even without the septic issue. On the OUTSIDE POSSIBILITY that the original appraisal could be in error DO NOT PASS GO, go directly to your state appraiser regulator.
No one is the industry is crazy about HVCC but it was brought on by pushed appraisals. Ultimately HVCC will bring some rationality to the market.
I am SURE this didnt happen in your case but THEORITICALLY the appraisal on your original purchase transaction might POSSIBLY (although assuredly not) been to show as a 4 BR. Below grade is a even without the septic issue. On the OUTSIDE POSSIBILITY that the original appraisal could be in error DO NOT PASS GO, go directly to your state appraiser regulator.
No one is the industry is crazy about HVCC but it was brought on by pushed appraisals. Ultimately HVCC will bring some rationality to the market.
Rooms below grade are considered basement. Even if you can walk out on one or more sides, if it is even an inch below grade, the ANSI standard used by Fannie, Freddie, ERC, FHA and VA generally require it be called a basement. That being said the Appraiser looks for other homes with similar finish in the basement if they exist. Can not use what does not exist though. To many Appraisers are poorly trained, the first Appraiser was wrong in the way it was described but does not mean the value was wrong. If it was two different points in time, the values could be both correct. Many realtors as well as some Appraisers do not correctly follow the ANSI standard. They include when they should not GLA Gross Living Area calculations that are incorrect. Basement, porches, attics, garages, etc should not normally be included. Just because a builder or realtor or assesor tells someone something wrong in how they calculated does not make it right. The ANSI American National Standards Institute are the ones that wrote the standards on caclulation of GLA. There is a specific correct way to measure properties, but too many individuals are not trained to do this properly. Some do not even know how to properly use measuring devices either, garbage in - garbage out as they say.