Home Buying in 20853>Question Details

Lovetrulia, Home Buyer in 20853

Appraiser (for home loan to buy) put 2.5 BR instead of 3.5; appr value was 40,000 less than ask; can we get a refund on his fee:what else did he miss?

Asked by Lovetrulia, 20853 Wed Jun 1, 2011

The bank's Appraiser (for home loan to buy a 20 year old home) put 2.5 BR instead of 3.5; his appraised value was 40,000 less than asking. We just caught the mistake after the bank threatened to not give us the loan despite excellent credit scores. Besides fixing the mistake, can we get a refund on his fee:what else did he miss? His mistake has really made this whole process incredibly stressful. How much extra should another bathroom add to an appraisal. Also the homes he compared this home to seemed very far away & not comparable. Thank you for any suggestions you can provide.

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Unfortunately you cannot get your money back. An appraisal is an independent opinion of value ordered to protect the bank and ensure that the amount of the loan is not more than the value of the home. If that 3rd bathroom was in the basement (aka below grade) it may or may not be counted separately. It might just be included in the value of the finished basement. This might actually be a blessing in disguise. I recommend two courses of action (1) have your Realtor review again the comparable sales data on similar homes in the neighborhood. Did you perphaps over offer on this one? Or were you working with a Seller that overpriced their home? If NOT the you shouhld (2) request a review of the appraisal and have your Realtor and the listing Realtor review the data together to point out any errors that are noted. The bank will often send out a field appraiser for a second review. If the value is there you can fight it or request a second appraisal. If it isn't you don't want to overpay so look for another home! p.s. VA and FHA appraisals stay on file for 6 months so you'll have to do a formal appeal on those. Conventional loan appraisals do not and can be easily re-done. Best of luck.
1 vote Thank Flag Link Wed Jun 1, 2011
This may or may not be a mistake at all. If all the bathrooms are above grade then there may be an error. However, please check the report, on the first page of the 1004 is an accounting of the total rooms, bedrooms, and bathroom count ABOVE GRADE. If the bathroom that you are referring to is in the basement, the appraiser probably accounted for the bathroom on the second (grid page) of the report. I suggest you check the report and you may be surprised to find the bathroom was appropriately counted in the finished basement section of the report
1 vote Thank Flag Link Wed Jun 1, 2011
I see this all of the time. First, look at your appraisal. The bathroom in the GLA section in the grid page goes on the upper line. GLA is the gross living area and is defined as all of the living area that is above grade or above ground level. The bathrooms below grade go in the basement and these will be noted on a different line just below this. This is probably the case. But if it is not, have the appraiser change the bathroom count to the correct one. Most likely, the bathroom will not make or break the appraisal value. The real issue is the home value and this is found in the comparable sales. Do a search to find the best comparable sales and compare this with the those in the appraisal. If you have any ground from this point, I'd look into it. Make dang sure that you are using the correct comparable sales, not 1 year old or older, in your market area, correct square footage, correct floor plan, etc. If not the appraiser will easily explain why the sales you picked are not the best sales.
0 votes Thank Flag Link Tue Jun 7, 2011

I can't agree more with Laura on this one. Her response is right on point, and there are some questions there that you need to address, especially this....

"Did you perphaps over offer on this one? Or were you working with a Seller that overpriced their home?"

Good Luck!
0 votes Thank Flag Link Tue Jun 7, 2011
I am sorry, but you will not be able to get your money back, but you can tell your lender that you wish to contest the appraisal and you will have to point out things that you see as incorrect in the appraisal. The bank can then try to appeal the appraisal on your behalf, though it might cost you more to have the appraiser come back out and do more research.

Unfortunately since lending changes a few years ago, sometime appraisers come from different areas who really do not know the market. I had a client buy a condo in Arlington and the appraiser came from PG Co . . .

Good luck!
0 votes Thank Flag Link Wed Jun 1, 2011
Jeff had a great point. What does your loan officer say? He or she should be able to read the appraisal to determine accuracy. I do always forget above and below grade myself. I think it's s silly rule but hey it is what it is. How far away and recent were the comps? There should be an net adjustment also at the bottom of the grid, what was that?
0 votes Thank Flag Link Wed Jun 1, 2011
Do you have an agent representing you in this purchase transaction? If so, what are they doing to assist you in the resolution of your concern? Due to recent regulatory changes, most lenders are not able to select the appraiser directly. Have you asked the lender and/or your agent about your options? I encourage you to consult with your real estate agent on this matter. I am also including a link for the Maryland regulatory board that governs appraisers.

Your friend in Real Estate

Gwen Henderson, Realtor®, AHWD, e-Pro
Short Sale and Foreclosure Resource (SFR)
Retired Military Spouse/Integrity First
Long and Foster Real Estate
White Oak/Silver Spring Office
301-502-2434 (c)
1-301-841-7969 (eFax)
0 votes Thank Flag Link Wed Jun 1, 2011
I agree with David and Charlotte; complain to the lender and ask that the report be " updated" which is what they generally refer to a report that needs to be changed after it's been published. IT is a factual error that will have an impact on the price, depending upon what is the normal price differential for a 3rd full bathroom in your area. You may also speak to the appraiser if you have their name and number. this will involve less red tape within the banking/lending institution, too. Good luck.
0 votes Thank Flag Link Wed Jun 1, 2011
Your loan officer should be fighting this battle for you. There is an appeals process it's usually pretty cumbersome but I have fought it and won. I probably put more work into them than most, it took me almost an entire day doing nothing but preparing one rebuttal form. I fought six and won three. First gather EXACTLY what's wrong with the appraisal. EVERYTHING. Then the loan officer should know how to appeal. Hard to say but one bathroom isn't going to get you where you need to be. THAT far off I would say is a longshot to get there. That does depend on the purchase price as well. You know if it's an 800k home than 40k might be reachable. If it's 400k well that's a tougher fight. I see your zip code and know that one very well. I actually live in it also. Contact me privately and I'll try and help if possible. Last thing, it is possible to throw out the old apprasal and start over. The lender can pay for it IF they agree that the appraiser made mistakes. I know it's a pain, don't quit, one dragged on for weeks and we got another appraiser and won the refinance for the clients.

0 votes Thank Flag Link Wed Jun 1, 2011
You should complain to the bank and request an entirely new appraisal. They will probably not give it to you, but they should at least correct the error, which will bring the value up slightly. It is a tough market and it stinks when the appraiser does their job quickly and makes mistakes. Like you said, there may be others as well, which is why you want to ask for an entirely new appraisal.
0 votes Thank Flag Link Wed Jun 1, 2011
Hi there! I'm so sorry this is so stressful for you. Some appraisers are very conservative, however, they all have guidelines that they should follow. Depending on the price of the home you are buying, the extra bedroom should be a credit of $2500 to $5000 or so. Does the 3rd bedroom have a full sized window and closet? If not, it may only be considered a den which would explain why he left it off. Either way, I would definitely call your lender and tell them that you would like to have the appraisal challenged. That will require them to do an in-house review and see if another appraisal is in order.

I hope the process moves along much smoother for you in the future!

All the best,

Charlotte Savoy
Keller Williams Realty
0 votes Thank Flag Link Wed Jun 1, 2011
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