Question Details

Mike, Home Buyer in Contra Costa

What happens when a lender doesn't agree with there own appraisal?

Asked by Mike, Contra Costa Wed Aug 20, 2008

The lender had me uses the "Approved" appraiser, then disagreed with the comps, and the value. The problem is there are no comps on as large of a lot, 6000 sq/ft vs an acre. They are requesting a second appraisal from another "Approved" appraiser at my expense, another $500. I used their person the first time, why do I need to pay for the second, is any recourse? Also can I take the appraisal to another lender?

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Hi Mike. Theoretically, the person who ordered the appraisal is the appraiser's client. While you are entitled to a copy if you paid for the appraisal, you are not the appraiser's client if your mortgage broker/agent ordered the appraisal. I would speak to your loan agent about finding another lender. It is definitely not commom for a lender to ask a buyer to pay for two separate appraisals and I agree with the others who suggested that a second appraisal will not make comparable properties magically appear. There are ways to make value adjustments for the lot size differences. That's part of what appraisers do and if the lender has an issue with what the appraiser did, they should have the appraiser make changes. If this appraiser can't make the changes they want, then another appraiser will most likely not be able to do anything different. Appraisers have to follow certain rules when they do their job and in my opinion, when the lenders require certain things to be done differently to fit their guidelines, they interfer with the appraisers job (i.e., to conduct an independent valuation) . Good luck to you you.
0 votes Thank Flag Link Thu Aug 21, 2008
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
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Being an "approved"appaiser only means they are approved to do business with the bank or mortgage company. Not approved to do a great job every time. If there are no exact comparables then they should used the best available and include an explanation page of why they were used and how they came about that value. Instead of getting a new appraisal they should ask the first appraiser to redo their appraiser. Is it missing explanations, can they find different comps. You can hire 10 appraisers, if there are no comps there are no comps. It is what you do with what you have and how you present it. They should be able to put a price on the land by using a square foot method for 6000sf or 1 or 2 acres. The house value is going to be the same on any loty and they should be able to figure out how much an acre is worth, turn it into square feet and divide it accordingly to get a sq foot method. I would appeal to have them redo beofre you spend good money after bad. Your next choice would be to find a trusted lender, stay away for the internet lenders. goo dluck with your purchase.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Thu Aug 21, 2008
If there are no sales then doing another appraisal is a waste of time. Find another lender. If you want me to make a phone call for you, or find another lender let me know. I live in Walnut Creek and my offices are in Alamo and Pleasanton.

Adrian Huntington
Welcome Home Real Estate & Finance
53 La Serena Ct.
Alamo, Ca 94507
adrianh@americanfinancialfunding.com
925-818-6694
0 votes Thank Flag Link Thu Aug 21, 2008
The problem is no house in the city on 1 acre have sold in the last year.
0 votes Thank Flag Link Thu Aug 21, 2008
Is your lender a retail bank, or a mortgage broker? If you are using a Wholesale Broker then have them submit your loan to another bank. If they have a problem with the comps and value, then have that appraiser find new comps. If there are no comps on a 6000 sq/ft vs an acre, then what good does another appraisal do? If the current appraiser can't find comps than another appraiser can't either. Sounds like they are not being 100% honest. Now if your property is over $1,000,000 then you would need two appraisals regardless.

Adrian Huntington
Welcome Home Real Estate & Finance
53 La Serena Ct.
Alamo, Ca 94507
adrianh@americanfinancialfunding.com
925-818-6694
0 votes Thank Flag Link Wed Aug 20, 2008
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