Home Selling in 35079>Question Details

Potteryluver, Home Seller in Hayden, AL

Our house was scheduled to close, but low-appraised and closing was cancelled. They used two local neighborhoods for the comparison.

Asked by Potteryluver, Hayden, AL Tue Oct 2, 2012

In the first area the homes are in the $122-130 area. They second area are in the mid $140's. In our neighborhood the house prices are $160 to $220. How can they use these two neighborhoods to compare to ours. All three of these areas are new homes also, but the quality is vastly different. We have been advised that our only option is to appeal the apprasial or short-sell our house. I would love some advise on our options. I don't see how they can compare apples to oranges. They need to be comparing apples to apples. Should we consult a lawyer? What would our options be? Thanks

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For an appraisal report to be valid, it must contain at least 3 comparable homes that have closed within the last 90-180 days. Should nothing comparable have closed in that time frame, the appraiser can go up to a maximum of 12 months from the inspection date. Often, an additional closed sale will be provided along with 1-2 pending sales or active listings for a total of 6 comparables.

Selection of comps is somewhat subjective based on the appraiser since it really is a judgment call. The best comps will be of similar age, square footage, # of bedrooms/bathrooms, and style of the subject property. At least 2 of those 3 comps should come from the subject property’s neighborhood. One must come from an outside neighborhood to better bracket the overall market area value. Appraisers do need to take into account school districts and city/county boundary lines.

The Appraiser Independence Code is part of an Act that all lenders must follow makes the disputing of a value quite difficult. To make a dispute, the lender must determine that the appraisal report is flawed and has a material defect. This means that comps that are “better” must have been available but not used. This means that your agent would have to provide these “better” comps to determine if a dispute is justified.

An appraisal cannot be disputed simply because it did not arrive at a certain value. That would be a violation of the Code.

Regards,
Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
rodney.mason@prospectmtg.com
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing
0 votes Thank Flag Link Wed Oct 3, 2012
I've heard of issues such as these before. It is possible that the appraiser was not familiar with your area. I’ve heard of similar things happen here in Birmingham. Now that the rules are different after the mortgage meltdown of a few years ago the way an appraiser is picked is supposed to be random. An appraiser is picked out of a pool of appraisers. Who is in this pool? Well, appraisers from all over basically. We have areas in the Birmingham area like near you where locals and those who work in the areas know that those 2 blocks sell for x, the 3 blocks over here sell for 2x, and the 5 blocks on the other side sell for x and a half. Realtors and Appraisers who work the area know this. If Appraiser A is drawn out of the hat and drives into town from 35 miles away to do a job, he may not know this. If you were represented by a Realtor, or actually your buyer’s agent, could have requested that the lender draw from appraisers out of an area close to your home, as those should be more familiar. Maybe give a list of 3 zip codes in your area and say we’d like anyone who comes from one of these zip codes to appraise so that they are familiar with the area. They may not, but its worth a shot. Also, an agent can go ahead and pull some comps that are actually comps to your home and meet the appraiser at the home. Be tactful, say hello, say I pulled these that are in this same neighborhood thought they may help. He may use them, may not, but you have to do what you can to make sure the home is represented as it should be. Are you represented by an agent? Were your buyers? Is the contract canceled due to unable to finance? If you are represented by an agent you have to ask them, it would be unethical of an agent to offer advice. No other agent should advise a client of another agent. If you are not represented by a Real Estate agent then we may offer advice.
0 votes Thank Flag Link Tue Oct 2, 2012
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