Home Buying in Santa Clara>Question Details

Nj, Home Buyer in Santa Clara, CA

URGENT HOME APPRAISAL QUESTION - I am in the process of buying a home. The home was appraised for $20k less

Asked by Nj, Santa Clara, CA Fri Jul 31, 2009

than the list price. The appraiser says he based it on the selling price of an identical home on the same lot. However, my realtor and the listing agent claim that the other home sold at the same price we're paying right now. The appraiser claims he got his information from the title company. While the two involved agents got their information from the MLS listings. Can someone please explain the possible reason behind this discrepancy ? To add to our confusion 2 online MLS listing websites quote the same selling price as the appraiser. Please HELP!!!

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The appraiser verified the sale price through the title company most likely because they got closing information and a document recording number from them. That number verifies the recording of the sale and would show the true recorded sales price. The appraiser was referred to the title company by the listing agent who closed the sale. The price recorded should be the price noted on the MLS as a closed sale. A discrepancy may have occurred between the two numbers and the appraiser took the recorded number. On a rare occasion (and it would have been found eventually by the MLS compliance department), the price is input on the MLS incorrectly. This can happen for a number of reasons; I would expect a typo occurred.

Those websties you refer to may use county records versus MLS information to come up with prices. That is probably how the same, lower, number keeps coming up.

You'll need a more in-depth discussion with the appraiser (your lender may ask your agent to do that since the lenders are essentially precluded from talking to the appraisers currently). This is because of the HVCC (Home Valuation Code of Conduct) that was recently enacted nationwide. Lenders order a random appraiser from a blind pool. That appraiser may or may not be particularly familiar with the neighborhood or city you are buying in. One of the main purposes outlined in the HVCC is the lender is not allowed to have any influence over the appraiser and their results so there is less chance of fraud or unjustified pricing.

Since you may be in jeopardy of losing the deal, your agent may be able to ask the appraiser if they might have overlooked some other comparable sales. Your agent may ask what the reasoning was for using the comps they did and coming up with the final value on the appraisal.

The appraiser may have given less value to the home you are buying for several other reasons as well. You may be reading the part of the appraisal that shows adjusted values (drawn by the appraiser) versus the actual recorded values. The other comp(s), (usually you need 3 solid, neighborhood, physically similar ones) may have been more upgraded, shown less obselescence, etc., and caused the home you are purchasing to appear to have less value.

It takes a little work and digging to fix problems like this and you have to be nice and polite to all of the people involved in the financing aspects of your deal.

Was it a multiple offer? Are you doing a low down payment (like FHA, etc.)? Was there a credit from the seller to the buyer for non-recurring closing costs?Sometimes you get an appraiser who is extremely conservative. They have a lot of new regulations to follow and most will be reluctant to appraise a property any higher (and usually lower) than recent comps. It is an unnatural environment and has caused a tremendous amount of heartache and disappointment for a lot of buyers in the past couple of months.

It stems from a lawsuit by Andrew Cuomo, NY AG, against Washington Mutual. In an effort to protect the public from the potential of fraudulent and inflated appraisals, they have clamped down so hard that it has had the opposite effect instead. You can't count on getting a reasonable appraisal. I've had one or two appraisal problems in my 24 years selling over 500 properties. The worst unsolvable problem was for $15K on a Cupertino townhome 21 years ago. Last week I had a $100K appraisal problem on a $650K sale. We have since gotten it reviewed and adjusted closer to the more appropriate value - that is a very long and painful story.

Work on your lender and the agents to come up with more comparable sales to justify the price. One comp doesn't ruin an appraisal, one way or the other. The appraiser may have had 5-6 good comps and had to bracket them (like in the Olympics - throw out the highest and the lowest). Keep asking questions and working on the people who are getting paid to help you buy your home.

Mark Burns, Realtor
Coldwell Banker Premier - Top 2% Worldwide
President - PRDS, Contracts and Forms for Silicon Valley 2008, 2009
President - Silicon Valley Association of Realtors 2007
DRE #00896552 licensed since 1985
Web Reference: http://www.markburns.com
1 vote Thank Flag Link Fri Jul 31, 2009
Online has no value ... they are just a check point.

MLS postings HOWEVER appraiser has last word on anything lender will only base their approval on published report. BUT report usually has at least 3 - 5 other like properties, info. "averaged" together determine value. NO APPRAISAL is based on just one home.

SOLUTION: either seller sales at appraised value OR skip it move onto another home, no lender will approve a loan over appraised value.

GOOD LUCK

National Featured Realtor and Consultant, Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Lynn911
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0 votes Thank Flag Link Tue Aug 11, 2009
Appraisal values are based on various factors. Usually the appraiser tries to get more than one comp within a one mile radius.

Are you sure that no other identical property was sold in the same or within one mile vicinity.

I am inclined to believe that the values quoted by the title companies to be accurate. I would also check the county records.

Try the same loan with a different lender and different appraisal company, you may get a higher value. No doubt you have to pay for the appraisal.

If you need help with finding the values, please feel to contact me at 408-505-5797
Web Reference: http://www.bestcaloans.com
0 votes Thank Flag Link Fri Jul 31, 2009
Could the reason behind the appraiser checking with the title company be the fact that the home sold barely a month ago? The other home sold on June 29th.
0 votes Thank Flag Link Fri Jul 31, 2009
My first question would be how/why the appraise got his info from a title company? Tax records will easily verify the information for all.
Web Reference: http://cindihagley.com
0 votes Thank Flag Link Fri Jul 31, 2009
Cindi Hagley,…, Real Estate Pro in San Ramon, CA
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