Bank of America Appraisal Issues - Landsafe

Asked by Rushwolf, Newton, MA Thu Jun 23, 2011

The first appraisal came in 35K less than contract price and was exterior only. BoA, to their credit, paid for a second appraisal since a home purchase needs an int inspection (duh!). The second appraiser used the same comps as the first but correctly updated the GLA of the house (from 820 sf to 915 sf). The end result, a second appraisal even lower than the first! The house is a bungalow in a neighborhood with 3,000 sf homes...there are no comps near us. The appraisers selected comps from a different neighborhood. They made no adjustments for location.

I forwarded info from the City assessor to BoA..the lots on the comps selected by the Landsafe appraiser are the same size as the subject. The comp lots are assessed for $40,000 less on the land. BoA will not reconsider the appraisal. I've been in lending purgatory since. Two weeks and counting with no answer from BoA...

Any suggestions!?

~ Frustrated in Newton, MA

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8
Scott Godzyk, Agent, Manchester, NH
Thu Jun 23, 2011
BEST ANSWER
With the new regulations the loan officer does not have communication with the appraiser, your listing agent should gather comps to give to the appraiser and bank showing the higher values. unfortanately assessed values do not count unless they actually sold for that much more given the location
Web Reference:  http://www.ScottSellsNH.com
0 votes
Ron Thomas, Agent, Fresno, CA
Mon Jul 11, 2011
It occurrs to me that you need a crash course in how they do an Appraisal:
(I would prefer to send you a mock up, but you'll have to rely on my communication skills.)

Visualize a series of COLUMNS, probably 4 or 5;
The First Column is the SUBJECT HOUSE and the others are COMP's.
Down the page we list FEATURES or FACTORS; such as # Bedrooms, # Baths, House Sqft, Lot Sqft, Fireplace, Pool, Roof, Garage, Fencing. Got it?
Now, in each box created, there will be a VALUE: Lets say the subject house is 915 sqft it would get --- or 0. And the first Comp house has 2500 sqft, it might get -100,000; which means that the house is WORTH $100,000 more because of the square-footage. (It is a negative number because the Selling price of that Comp house was approximately $100,000 more BECAUSE of the square footage and we have to deduct that $100,000 to bring them to equity.) Got it?

Now, lets say that the Subject house has $5,000 worth of new fencing and the Comp house has 25 year old OK fencing.: Then the SUBJECT house would get +5,000 and the Comp. house would get --- or 0.

When you go down the page, and enter everything, you get total Comparative Values on the two houses, which allows for the DIFFERENCES.

The two houses DO NOT have to be literally COMPARABLE, we MAKE then comparable with the VALUES.

So the house next door is larger, so what? We made up for that with the values.

Now, if you understand what I just did, then you will understand why;
1.) The two Appraisals came so close together, and,
2.) Why BofA will not listen to you about the results.
and in fact I will give you a third;
3.) If you hire your own Appraiser, he will end up with about the same numbers!

Also, please do not compare/equate the ASSESSMENT with the APPRAISAL: The ASSESSMENT is based on the LAST SELLING PRICE OF THE PROPERTY which might be last year. five years ago, or thirty years ago. Comprende?

I hope I've helped.

Good luck and may God bless
2 votes
, ,
Thu Jun 23, 2011
Regarding BofA's lack of immediate response on the appraisal issue - it's not surprising as they are a very large bank with a detailed procedure for most everything. Depending on how different these two appraisals were (BofA are idiots for not ordering the correct one from the beginning, would have saved you quite a bit of time), the appraisal review department could now be determining if they would want a field review done to confirm the accuracy of the appraisals they have. A field review is where yet another appraiser goes out to the property, along with a copy of the appraisal report, and confirms the accuracy of the appraisal or notates any differences. If the appraisal that the field review was being done on is accurate, then it's value would be accepted. There is also a desk review, which is the same thing but without going out to the property (desk reviews aren't terribly accurate IMO).

Hopefully it isn't that, hopefully BofA would just be content with the lower of the two values (which is also the more detailed appraisal as it sounds) and be done with it, allowing you to get on with your life. If you feel the same way, explain that to your loan officer and have him or her portray that quickly and concisely to their underwriting staff.
2 votes
dsircock, Home Buyer, Atlanta, GA
Fri Jan 18, 2013
Screw what bank or Appraiser . There is code of conduct for appraisers. Three steps
One home replacement cost. Which is excepted . If appraisers can't conduct a three home comparison value to your home. Or have experience how to. Home replacement same as your home insurance does and acceptable ny freddie mac and freddie mae. Other steps renters crap. But researched code of conduct of appraisers clearly states whats accepted..
0 votes
Oh Give Me A…, Home Owner, Waltham, MA
Sat Oct 29, 2011
Rushwolf:

Several questions:

1) Have you tried other banks or mortgage companies? Perhaps a local bank may be more readily willing to work with you. At least maybe their customer service would be more to your satisfaction. My experience was wonderful with a neighborhood bank in Brighton, and I never had an issue with their timeliness of a response.
2) Would your landlord be willing to do a rent-to-own agreement? It would show good faith on the landlord's part, to allow the rent at this point to be applied as credit towards your closing, if you do purchase the house within a specified time frame.

And, as for Good Luck's comment about Waltham, I would suggest that it may be difficult though, if you go from a neighborhood with houses that are 3000 sq foot, to one with lot sizes that amount!

Hopefully, you'll find a compatible solution, between the seller and perhaps a different bank. Hang in there!
0 votes
Good Luck, , Waltham, MA
Thu Oct 27, 2011
Sell your house and move to Waltham
0 votes
Rushwolf, Home Buyer, Newton, MA
Thu Jun 23, 2011
Thanks for the quick answers. I rent the place and bought with no broker. I have had real estate agents review the place and am confident that the contract price is fair.

The worst part is that I'm prepared to bring the additional $$ to closing, even based on the lower appraisal. I have indicated the same to BoA and it's been a full week with no response. The two appraisals are with the BoA "appraisal department" to figure out if they will give me 80% on $400,000 or $394,800...the two appraisal values. I could case less which one they use, I just want to close the deal. The problem is no one at Bank of America can do anything until the "appraisal department" makes a decision. Is it typical for this process to take so long? I've had to extend the mortgage contingency clause and closing multiple times due to the appraisal issues...both buyer and seller are ready to close but we can't get the bank to the table.

Is there anything I can do to expedite the process or am I stuck in a holding pattern? I pay rent per diem on the place right now so each day that passes costs me $$...not a huge amount in the big picture, but additionally frustrating nonetheless...

Thanks.
0 votes
, ,
Thu Jun 23, 2011
Hi Rushwolf. Sorry to hear about your issues. Given new and far stricter guideline governing appraisals, Lenders now have little to no say concerning them. Only possible--and remore chance---of disputing the value and raising it is to have your realtor produce some comparable sales supporting the increase.
0 votes
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