L. Obrien, Other/Just Looking in 81631

Recourse for an appraisal we felt was unfair and not in line with comparibles - ie $211 vs. 250/270sq.ft.

Asked by L. Obrien, 81631 Sat Oct 13, 2007

Home recently updated - kitchen, bathrooms, yard. Decluttered with neutral colors. Advantage of corner lot with almost 1/2 acre compared to homes w/1/16th of an acre. Despite its age built in 1981 the inspection showed only minor things. This appraisal lost our sale. We are selling on our own and with all the research done (looking at what prices are, what they sold for, square footage, amt. per square ft). Shouldn't the amount of land figure into this appraisal? We are in a VERY desirable family friendly neighborhood. Most of the homes selling within 6 months of being on the market.

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4
Carrie Crowe…, Agent, Southaven, MS
Sun Oct 14, 2007
To protect yourself from this in the future, as this deal is already dead. You might consider getting your own appraisal done on the property. Besure they know it is for resale and not refi as they are a little different. Then if this happens again you can say you have a differing appraisal and it may help the situation. If your appraisal shows the same numbers as the first, then you know you need to consider adjusting your price. The good thing about getting your own, is your appraisor can help you understand why he used certain comps, and if the ones you chose are different why they weren't considered. The appraisor can also give you an idea of the market trend. It is better to be more informed than less informed.
Web Reference:  http://carriecrowell.com
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Ute Ferdig -…, Agent, New Castle, DE
Sat Oct 13, 2007
Hello L. Obrien. When you did your fair market value research, did you consider that most homes are sold through the MLS and the sale price should be adjusted down to take the sales commissions into consideration? How long has your property been on the market and how far back did you go when you considered comparable sales. Let's say your property was on the market for three months when you received your offer, did you go back an look at what properties sold for during the 3 months that you were on the market? Did you get to see the appraisal that was prepared for the buyer? One thing you need to be aware of, lenders have become a lot stricter with appraisals and they ask a lot more questions about appraised value than they used to a year ago. This has led to appraisers being a lot more conservative in their valuation process.
Your recourse is to do new research based on the current market. Unless you have access to recently sold data through a real estate agent, you'll be limited to researching public records which are outdated by the time they become available to the public.
Web Reference:  http://www.theMLShub.com
0 votes
Jim Walker, Agent, Carmichael, CA
Sat Oct 13, 2007
Land does play a role in an appraisal of similar homes, incrementally. Your home on half an acre is still one home on one lot. For a home to be on only 1/16th of an acre it must be a row house or town house? 1/16th of an acre is only about 2700 sq feet +/- / Are these smaller homes as well as being on smaller lots? You say you have comps at $250 to $270 per foot. - Are they really comparable? If the townhomes at $250 per foot sold were only 1200 sq foot ( $300,000 ) and you are mad because your 2000 square foot home is only $211 a foot ($ 422,000 ) Then you are trying to have an apple compared to orange (instead of apple to apple) Price per square foot is routinely higher for smaller homes than it is for bigger homes.

You probably have no recourse against the appraiser. The appraisal is just one professionals opinion. The appraiser would certainly have annotated his appraisal document with the limitations of the scope of the appraisal. Several of those limitations are worded to protect them against people who disagree with their opinion from taking action against them.

Immediately after the low appraisal you and the buyer had options to save the deal. Best for you would have been if buyer had been willing to come up with cash for the difference. Best for the buyer would have been if you had lowered the price to the appraised amount. Sometimes a compromise can be reached at a mid-point.

If that buyer is gone forever, you must now start fresh. Ignore the appraisal and ignore your old asking price. Ask a realtor to give you a fresh market analysis. Offer (insistently) to pay a BPO fee (Broker Pirce Opinion Fee) of $75 to $150 since you do not intend to use a Realtor for the marketing (you said you are selling on your own).
Only a accept a free market analysis is there is a possibility that you might use a realtor in the future.

Do not be too discouraged. Sales do occasionally fall out of escrow. Even if you had a Realtor, it still could have happened. Some really great Realtor might have saved that deal, but we can never really know.
0 votes
Carole Cohen, Agent, Cleveland, OH
Sat Oct 13, 2007
Here in NE Ohio we go to our County Auditors Office to get answers to this question; that is because the County Auditor does our taxes; I don't know who handles your taxes in your area. Here we are allowed to question the appraised value of our homes (tax value). As far as a market value appraisal.....and I don't know which type you recieved - you can go to a brokerage that specializes in sales in your area and ask them to hook you up with a neighborhood realtor who can help you with this.
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