Financing in 92102>Question Details

John Devine, Home Buyer in San Diego, CA

Detached Condo Appraisal disagreement with Navy Fed

Asked by John Devine, San Diego, CA Wed Oct 2, 2013

I had a Home Appraisal done for a home refi with Navy Fed. The Appraisal came in much lower than expected....Much lower. I bought the house for 335K in Jan 2012. It was built in 2011 and I am the first occupant. The appraiser used condos as Comps as my place is zoned as a condo, but you could never tell as it looks and feels like a single family home. All the Comps he used were from condo complexes and were smaller, older, less bedrooms, less bathrooms and were not comparable at all. I asked for an appeal to the appraisal and that resulted in going no where. The Appeal goes back to the same appraiser for him to tell me he didn't make any mistakes. Zillow lists it for 560k, gives it 404k. I have done a couple updates nothing crazy but the appraisal came in at 340k I bought it for 335k back in Jan 12. I would guess that it would have gone up just as much of san diego real estate has gone up. Navy Federal says their hands are tied because its listed as a condo.

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I've been reading your comments and I think there needs to be some clarification with the answers you are receiving. A condo is not a type of structure, it's a manner of ownership. Whether it's attached, detached, looks like a SFR or not is irrelevant; what makes it a condo or not is based on ownership rights. It's very easy to find out if it's a condo or not and if it is, it will be compared to condos even if they don't look like yours.

I get that you are trying to do a conventional loan rather than an FHA streamline because you believe you have 20% equity, Navy Fed isn't going to reverse the appraisal so if you want to refinance, you have no option but to get a new lender. Navy Fed isn't the best source for conforming financing anyway so you really should look elsewhere.

Straighten out whether you have a condo or not, then proceed with a new lender and a new appraisal. My offer for assistance still stands.
1 vote Thank Flag Link Thu Oct 3, 2013
Its a sad situation with Navy Fed right now. I should write a book with how this has gone. They lost my loan for 3 weeks. I mean didn't have a loan, they canceled it on me by mistake. Then they find out that I can't refi with a VA loan. But they suggest doing a conventional loan assuming I have 20% which I thought that as long as the appraisal or zillow estimate was within 60-70k difference I would be fine right? I don't claim to be a expert by any means. But when I look at a graph of home prices from January 2012 to today I notice a increase. For them to say that it hasn't gone up I think is pretty bad. Me saying that I bought my place for 50k less than my neighbor (who has very similar place built by same company). You could be very right so I'm not disagreeing in any manor, kinda venting/asking how can my house which no connected walls be compared to a unit in a condo complex? Wish I knew more about all of this. First time house lots of lessons thanks again.
Flag Sat Oct 5, 2013
Sorry to be the bearer of bad news... BUT

1: If the original appraisal was a VA appraisal, it will follow you regardless of the lender.

2: If it is recorded @ the county as a condo, then the appraiser needs to go by what the county has the property listed as vs what the owner claims whether it be a condo, manufactured home, stick built 2 unit vs 4 unit etc.

3: An appraiser can and should use smaller comps if they are close to the subject property and recently sold as long as he takes the sq footage /bed/baths into consideration when calculating the comparison approach (they will add value to the appraisal for more sq footage, added features, better condition etc and remove value for less bathrooms, deferred maintenance, etc to come up with the value of the home compared to neighboring recent closings).

4: Appraisers weigh more on recent sales and close vicinity for comparison vs size due to the volatility of prices and the ability to compensate for sq footage bed/bath discrepancies in calculation.

***If you truly believe it is a SFR detached there may be a way to take it up with the county, but I'm pretty confident that their records would be straight from the builders' permits which once stamped by the planning dept pretty much seal the fate of the property type forever.
1 vote Thank Flag Link Thu Oct 3, 2013
I originally wanted to do a VA loan....Thats another part of the story. The VA cannot approve this because there is no HOA!. Really weird but when I bought this house I needed to close on it quick and the VA loan was taking too long probably for the same reasons, so my realtor suggested I do a FHA loan. I did and it worked out. But I believe I have 20% equity in this house provided the appraisal comes out to at least 8% value increase. I would have thought that would be easily doable due to the market increase since Jan 2012. Very frustrated at the appraisal as how can you compare a condo complex unit to mine that looks and feels like a SFR, No HOA, my own Garage, Small yard, but is zoned as a condo?
Flag Thu Oct 3, 2013
I am assuming that you are trying to do a VA loan, if that is the case then: NO NO NO do not go to a new lender. The reason is that they appraisal is a part of the record you can not get another appraisal.

Here is what you need. You need your lender to make a better case as to why they appraiser needs to adjust the value.

Now if you are trying for a conforming mortgage you could get a new appraiser from a new lender.
1 vote Thank Flag Link Thu Oct 3, 2013
John - It's possible that you received a conservative appraisal, as the value conclusion is very subjective. Appeals rarely result in an appraiser changing their opinion of value. Was the purpose of the refinance to lower your interest rate, or maybe eliminate private mortgage insurance? If your current rate is 3.8*, there is certainly no reason to refinance to improve the rate.

You're correct to expect some appreciation year-over-year. In your zip code condo's have increased approximately $45 per square foot on average, or about an 8.7% increase. With the limited inventory in your zip code, I'd think you'd benefit from having another less conservative lender take a look. Please reach out to me for a reputable referral!
1 vote Thank Flag Link Wed Oct 2, 2013
Current rate at 4.5, locked in at 3.8 and wanting to get rid of PMI was the reason for the refi. I thought that I would have 20% equity for a conventional loan, but the appraiser is basically saying that the property has not gone up at all since Jan 2012
Flag Thu Oct 3, 2013
Hey John,

A couple quick answers for you:

a) An appraisers hands are tied when working with condo's. Even if it is a detached condo, it goes on a separate form, and they have to be appraised with other condo's. I am not saying that the appraiser is correct, but that is the reality.

b) Navy Fed isnt really that good. They are definitely not going to fight for your value. I am a former Marine, use Navy fed for banking, but in the mortgage arena they are not great.

The other option that you DEFINITELY have is to see if you qualify for a HARP refinance. HARP refinances require no appraisal, and I can see if you qualify in about 2 minutes... Rates are the same as typical conventional. The only difference is that the appraisal is waived... Rate/Term only, no cash out allowed obviously...

Give me a call or shoot me an email and I can take care of you, or shoot you in the right direction...

But do it before this debt ceiling thing gets out of hand...

Talk to you soon,

Daniel Lehman
WJ Bradley Mortgage Capital
0 votes Thank Flag Link Tue Oct 15, 2013
Just being zoned as a condo does not make it a condo.

There are all kinds of properties in the wrong zone. Go to your city and see if they have it listed as a condo. If you not get a letter from them saying that. The lender will also need a "rebuild letter" which says if the house burns down they will allow you to rebuild the house and not a condo.

By the way FHA appraisals attach to the property as well.
0 votes Thank Flag Link Thu Oct 10, 2013
The only option you have is to go to a new lender who would order a new appraisal and hopefully the same thing does not happen.

Alex Greer
Loan Officer
NMLS #1056079

0 votes Thank Flag Link Thu Oct 3, 2013
Try a new lender, you will have to pay for a new appraisal but you might find favorable results. Choose a loan officer that is also a licensed RE agent that can do a comparative market analysis for you prior to spending more money.

Let me know if I can help, I'd be happy to do the analysis for you.
0 votes Thank Flag Link Wed Oct 2, 2013
It would be best to try and new lender and get a new appraisal on the property. Give me a call if you would like the name of a few lenders in the area that will help you through the process. (858)761-6695
0 votes Thank Flag Link Wed Oct 2, 2013
You could try another direct lender?
0 votes Thank Flag Link Wed Oct 2, 2013
You may just want to try and refinance through a different lender....
0 votes Thank Flag Link Wed Oct 2, 2013
Although you have great rate locked, you may have no choice if your lender is telling you their hands are tied. Check with someone else for current rate quote and then you may have to do an analysis to see if the current rate still makes sense even if it is higher. Wish I had a better solution for you and I understand your frustration.
Flag Thu Oct 3, 2013
As much as that might have to happen, I am currently locked in at a 3.8% and I dont know if I see that getting any better......
Flag Wed Oct 2, 2013
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