Hello Brian,
Sorry to hear about your situation. The same applies to many home buyers relying on an "independent appraisal" to be at or above the agreed on purchase price of the home. The mortgage company is not responible for the rate at which an appraisal comes back at. The only control they have is with the company they used. You can ask for another "independent appraisal" but you will pay for it. I have seen day and night differences. Hope this helps.

Sarah Garrett, Realtor
ALLIANCE REALTY GROUP
"Chosen Best in Client Satisfaction 2006-2009"
By Gulfshore Life Magazine
sarahgarrett@argfl.com
239-464-8620

Though there are many excellent answers already, I feel the need to say the this trend to appraise low is becoming very hurtful to all the markets. It's clear that the market is trying to recover, and in order to finally turn around, it has to go up. Appraisers that feel the need to come in under contract prices by $2000 or $3000. are holding us down and even costing sales...how does that help anyone? I agree that if there are no comps to support $5000, $10,000+, then that's reason to reduce, but $2000??? Especially if the subject home is on city water and sewer and comps are well and septic. It's as frustrating as dealing with an asset manager that says they won't come down to the apprasied price. If the comps aren't there for $10,000. over the apprasied price, can we please have some common sence decisions by asset managers?? If didn't appraise at the higher price for my buyer...why do they think it will for the next buyer that needs a mortgage?? Anyone feeling my pain????

Yes there will be some people who follow the $$$ unfortunately. Personally I don't. I work an area of Aprox. a 25 radius. This is the common range the some of the AMC assign the work in. We have to list the Zip Codes we cover. The OREA in CA feels an Appraiser can work anywhere in the State. HOWEVER, we must comply to USPAP. The Competency Rule of USPAP. To do that if I went to an area to accept the assignment 1st I have to notify the Client I'm not familiar with the area. If they still wanted me to continue. Then I must take the steps to get educated about the area like. Interview Agents go to Zoning & Building Depts the Library you get the picture. This could take a week or more. The price of the Appraisal assignment would have to cover all the necessary cost of such assignment.
This is done more likely on a Commercial or Investment property but not a run of the mill Residential property with a 48 to 72 hour turn around time.
So the long and short is the Competency Rule is the out of area Appraiser violated it and can they prove they were competent to do the assignment. If they can show they are competent they can do the out of area work.

Brian
Thank you for your posts. The only saving grace of the appraisal fiasco is that it will drive the market to the bottom sooner than later. As markets (regionally - meaning your market has a LONGGG way to go) turn around buyers will simply have to put down more cash in order to buy the home they want to give appraisers new comps at higher values. The downside is that the "problems" with appraisers working outside their market area is going to continue.

That an Appraisal comes in under the Contract price is not necessarily a bad thing. The Appraisal aids the lender in (LTV) Loan to Value ratio. In the past before the sharp rise & fall of prices in the Real Estate Market. If a Appraisal came in under valued quite often the Buyer would come up with a larger down-payment or it would be come a point of renegotiation. This didn't play havoc as it does in today mind set.
Most often the problem is the Comparables used. Are they the best? Are you aware of any better that should of been considered. Then challenge the Appraisal to the Lender & AMC that review it.
Beware if your in a declining market. If you have a Comparable and it closed 6 months ago for a higher amount than a resent Comparable it will require a market time adjustment to lower it's price to reflect the current declining market.
REO & Short Sales can be used if the market is driven by these sales and a statement in the Appraiser report will say they are considered. Standard Sales are preferred but not plentiful in a declining market. Also distance to the subject is a priority the closer the better since those will be most like the subject sharing the same schools and amenities.
In other word a recent close sale can not be ignored to find a higher farther out one. Comparables would need to be more accurate to show the current market condition.
However if you feel your Comparables are better or not considered you may challenge the Appraisal.
If the Appraiser has considered they properties already they will answer why the were not consider or used if they already haven't done so in the report.

Brian,

Write your Senators and Representatives with your exact sentiments above. And sign the HVCC petition too:

http://www.hvccpetition.com/

Rob Spinosa
rspinosa@mortgagemasterinc.com

Brian,

The appraisers are all skittish and its country wide. They don't want to be made examples of and they will be hung if they are caught puffing up an appraisal. On the other hand though, they are professionals, and just because you think a property is worth so much, doesn't mean it has a fair market value of the same price or greater.

Good Luck!

The appraisal problem is a national issue and not limited to just Cape Coral or Southwest Florida. It is a result of a clampdown on the appraisal industry that was operating in a "wild west" manner in the market boom years. Unfortunately, the regulation appears to have gone to far and is hurting many home buyers right now. The National Association of Realtors is actively fighting this issue on a national level.

One of the interesting thing about Cape Coral single-family home market is that prices have been very steady this year. Here is a recent blog post about Cape Coral prices in 2009: http://www.gulfreturns.com/2009/06/cape-coral-home-prices-st…

Good luck getting a fair appraisal.

Hey Brian,

Unfortunately, houses are appraising low more and more often in deals throughout Southwest Florida. It is a major problem right now. Banks are being very strict with guidelines causing appraisers to act quite conservatively. Many properties in a variety of price ranges are coming in low when appraised because of this and causing delays in closing (at best) and killing deals entirely (at worst).

Best of luck, and take care,

Tim Bishop
Century 21 Sunbelt Realty
239-297-4218
Bish322@yahoo.com
timothy.capecoralhomesnow.com

The best thing to do is help the appraisers with their job. Have some comparable houses in the local area printed up for them along with a list of active, pending and sold comparable properties. If your using a Realtor, they can supply even more infomation to help the appraiser. The appraisers love this to, because it makes it easier for them to do their job.

The problem that your having seems to be common lately.