Appraiser Negligent? What can I do?

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Mike242

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Post Posted: Tue Jun 08, 2010 3:30 am    Post subject: Appraiser Negligent? What can I do?
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I just had an appraisal done on my house for a refinance.

Prior to the appraisal, I had remodeled 2/3 of my house down to the studs - hardwood bamboo flooring, vaulted ceilings, new cabinets in the kitchen, granite counter tops, stainless steel appliances, new windows, new lighting and fixtures, in wall speaker wires, all custom and very nice looking. I basically had a brand new kitchen, dining area, laundry room, wet bar, pantry, and foyer - all custom made, could even be shown in a magazine. Less than 2 years ago, I remodeled the bathroom. Less than 2 years ago, I put in a new front fence, all new landscaping, and have it maintained professionally every week - best yard around. I just finished painting the entire exterior of the house 2 days before the appraisal.

My appraisal identified my property condition as "average".

The appraisal had 4 comps, 2 of which were REO foreclosures.

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Mike242

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Post Posted: Tue Jun 08, 2010 3:44 am    Post subject: Negligent appraiser?
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No consideration or adjustments were given for the property improvements, the landscaping, or the curb appeal. The comps were all also identified as "average". I suspected that the comps were not really comparable so I decided to take a look.

Two of the properties were uninhabitable, with missing or broken appliances, torn up flooring, unkempt yards, outdated and broken fixtures, rotted fences (waiting to be blown over), a broken heater, a ceiling fan hanging by the wires, paint peeling, cracked stucco, basically totally thrashed. I talked to two guys working on one of the properties and they identified that the property was even worse when sold, with weeds waist high, and a rancid urine smell that permeated the house, it was difficult to work. You could still smell it, even with the floors torn up, and carpets removed. It still needed a lot of work before the new owners could even move in.

The other two properties were in worse locations than mine, right next to R-2 (medium density housing). Neither had attractive yards. One had a bad roof and was missing siding in several spots.

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Mike242

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Post Posted: Tue Jun 08, 2010 3:56 am    Post subject: Negligent appraiser?
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One of those two properties had a gorgeous view of the freeway with the pleasant lull of traffic and semi trucks, as well as a view of the mobilehome park adjacent below the downslope of the property, most of which could not be utilized.

No adjustments were made for any of the above conditions. I guess that's what is also considered "average".

And to finally top it off, the appraisal reflected my property as having a residential view, never mind that I have an ocean view from the living room and porch that cannot be obstructed due to the geography. This seems like a serious omission to me.

My house came in at $270k, and the comps coming in at $233k - $309k. The property that was rancid, needed likely $30-50k just to be livable, came in at $285k. Maybe I should have trained my dogs to do their business indoors...

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Mike242

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Post Posted: Tue Jun 08, 2010 4:12 am    Post subject: Negligent appraiser?
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The appriasal even stated that the house with the second most amount of damage and the rancid smell had the most weight on the appraisal since it had the least amount of net and gross adjustments. Since the properties were very similar in size, lot size, and same room/bedroom count, I can understand that logic. The only adjustments on that one were for 2 SF on the lot and 100 SF on the gross living area. But no adjustments in my favor for view, condition, appliances, having floors, etc?

I am obviously challenging the appraisal, already sent my mortgage broker a lengthy document detailing the things the appraiser missed with photos. The closest real comps (sold) I could find and current listings should realistically yield $369k to $410k.

Is this negligence?

Is it actionable (legally)?

Is there anything else I should do?

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Icon Mini Profile jameshogg
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Post Posted: Tue Jun 08, 2010 10:30 pm    Post subject:
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Hi Mike,

The appraiser will consider the comps available in the locality and appraise the property as per those comps. I don't think it's negligence on the part of the appraiser and I don't think it's actionable. However, if you feel that appraiser has done anything wrong, you can definitely file a lawsuit against him.

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Mike242

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Post Posted: Wed Jun 09, 2010 4:18 am    Post subject:
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Thanks James. I just don't buy that the properties are comparable, but given that they were chosen, the condition should be taken into account as adjustments. That's why there is a column, the same way that there is a column for square footage. Condition and amenities are a factor that all buyers take into account when purchasing a house, especially if they have to put money into the property immediately after the sale to make it livable.

A fixer upper should not get the same condition (no adjustments reflected) as a house that is turnkey.

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Icon Mini Profile apexoffice
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Post Posted: Wed Jun 09, 2010 4:29 pm    Post subject:
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Mike,

If I may say, you appear to be well versed in the correct terminology and have a reasonably good grasp on real estate marketing principles. I do apologize that something like this has happened to you and based strictly on your reasoning, I can’t say that I disagree. Of course, I have not had an opportunity to review the report, nor do I assume to have knowledge of your market.

Having said that, you can often rebut the appraisal with the lender. To do this, it will often need to be more than just a complaint, but rather you will need specific data to support your conclusions. I hate that this burden is placed on the homeowner when it is not their fault that the appraiser is either incompetent or negligent but likely the lender will not take responsibility. I would invoke the assistance of a local real estate agent or another appraiser that has access to the data such as MLS to conduct the research or even have them conduct the research for you for a small fee.

All you would really need is to provide recent sales from the neighborhood that are visibly more similar to your property. If these sales exist, they will likely first ask the original appraiser to view the sales and reconsider the value. Beyond that, the only next option is to request that the lender get a second opinion from another appraiser. Some will and some won’t.

Good Luck

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Bryan44

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Post Posted: Thu Jun 10, 2010 3:37 pm    Post subject: Appraisal
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I would definitely rebut and request another appraisal to be completed, if the values differ by a large amount, both appraisers will be asked to explain the adjustments, etc.

It appears that this was an appraisal completed by an appraiser that is most likely cutting the amount of time he spends on an appraisal due to lower fees paid by the appraisal management companies.

Regardless of pay, an appraiser needs to put in all the time that is required to determine an opinion of value.

Provide your information for the rebuttal and you should be good to go.

Bryan Knowlton
San Diego Appraiser
Appraise All
Mike242

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Post Posted: Mon Jun 21, 2010 10:42 pm    Post subject:
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I am rebutting the appraisal. I don't expect I'll get the amount I need even if a second appraisal is done or adjustments are made, but I have to do this on principle. Will update if this goes anywhere.
Oscar Agosto

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Post Posted: Mon Oct 10, 2011 12:58 pm    Post subject: Bad Appraisaler
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In the state of New Jersey, to whom do I report an appraiser who delibraitly under values a home they did an appraisal on
Icon Mini Profile smithsussane
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Post Posted: Mon Oct 10, 2011 10:36 pm    Post subject:
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Hi Oscar Agosto!

Welcome to forums!

As far as I know, complaint forms are available online or you may contact the Board office in order to file a complaint against the appraiser.

Feel free to ask if you've further queries.

Sussane
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