Appraisal of TIC building came in on our Refi at about 30% less than market. HELP! Inexperienced Appraiser = flawed appraisal.

Asked by Judy Rollyson, Sparks, NV Mon Jul 29, 2013

We have a TIC building in San Francisco. 4 unit. Totally redone and finished in 2008 (studs and up). Beautiful building and great view of the bay. Trying to refi (Wells Fargo) and the appraisal came in about 30% off market. Not 30% off what we "hoped" it was worth but 30% off the actual market. The comps were horrible, room count figured differently subject vs comp, off market comp used with skewed figure, wrong condition used meaning bad adjustments. We have sent better comps - closer in size, condition, type, etc. than those actually used, questioned. The loan officer worked as hard on this loan as we did. We just can't allow this appraisal to derail all that work. What do you do if you get a really bad appraiser and thus a flawed appraisal?

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4
Jacob Varghe…, , San Jose, CA
Mon Jul 29, 2013
I have had to fight a couple of times to get appraisals corrected. Here are some options:

1) Send 3 sold comps of most recent sales to the Lender/Appraisal Management Team with reasons why you think the 3 comps are the one to be considered.

2) Order a new appraisal.

3) Find a different lender

Thanks
Jacob
NMLS 327086
0 votes
George Langf…, Agent, San Francisco, CA
Mon Jul 29, 2013
OUCH! In some cases you can dispute the appraisal and send over comps with your dispute, which it look like you have done here. You can pay the cost to have another appraisal done, yes it's costly but the extra $700+ worth the savings from the refi. The key though would be to ask your loan agent to ensure they appraiser is local and experienced. I always speak to the appraiser over the phone before I allow them into properties. When banks request an appraisal they simply place a work order into a system and whomever can pick it up. You have the right to request a new appraisal. But something is definitely wrong here if it's 30% off the mark.

Feel free to contact me if you have any questions.

Cheers!
George

George Langford - Senior Sales Associate
Founder of SevenSquaredSF.com and SanFranciscoFrontDoorSteps.com
Climb Real Estate Group
251 Rhode Island, Suite 105
San Francisco, CA 94103
T: 415.336.8191
BRE#01719561
0 votes
Matthew Goul…, Agent, San Francisco, CA
Mon Jul 29, 2013
Hi,

Well it looks like you are on track for the first step, sending in a rebuttal for the current appraisal. If this fails you may want to consider having a second appraisal done and / or talk to another lender to see if this helps.

I assume you are on the group loan and everyone has great credit etc, without knowing the address it is hard to say if the appraisal if XX% off the market or not, they would most likely be using a multi unit building comps instead of TIC units.

Good luck,

Matt
0 votes
The time spent getting everyone's financials together was a long process. The loan is 100% approved. All we need is the appraisal which is why I want of fix that issue rather than start from scratch. We are in the condo conversion (submitted this morning) so we will keep with the group loan for now. We all get along great and it is a really good, strong TIC.

We are basically at the corner of Mason and Union. Totally redone. Gorgeous views. Great finishings (bamboo hardwood, viking appliances, bosch, tankless water heater, etc. Very high end and very well maintained. A Japanese garden in the backyard with patio.

I don't know what specifics I can use on this. Basically he used our condition as "good" when it clearly should be "very good". One comp he used "average" when even the marketing materials clearly say the entire building needs redone. The room count my unit is 2 bd/2bath =4 rooms.on comps same = 5 or 6 rooms? All comps.
Flag Mon Jul 29, 2013
Amanda Jones, Agent, San Francisco, CA
Mon Jul 29, 2013
TIC group loans are valued like an apartment building. Likely the appraiser was using that not TIC properties with fractional loans. Frankly I am not surprised. Have considered using Sterling or Bank of Marin or NCB for fractional financing? I deal with Walkup Clark and also with Anthony at Mr. Appraisal quite a bit for TICS. you can request a review of the loan or just trash it and go elsewhere for the loan.

I think that Mickey Cogliandro at Guaranteed Rate or John Ybarra or Henry Jeanes at Sterling could help.

hope that this helps you. Get it done soon. Rates are up and the whole TIC market is in a turmoil over the new legislation.
Amanda
0 votes
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