Under Water Homes - And Lowball Appraisals Don't Help!
This morning's article in the Wall Street Journal,
Fighting Back Against Lowball Home Appraisals
made me recall some recent similar appraisal issues with home purchases. The story above is about a couple who want to refinance and the first appraisal would put them under water. With interest rates continuing to set record lows, who would not want to re-fi?
A recent home sale fell through because the appraiser came in low. For comparables she use 3 short sales and made no adjustment claiming "that a buyer expects to pay short sale prices even for a resale". (We consulted another appraiser who said that was not true, and the appraisal should have been adjusted.)
Nevertheless, the deal fell through. Less than 30 days later we had another contract and another appraisal done. This time the appraisal came in 15% highter! How can appraiser be this far apart? Well as the above article quotes;
"We know we don't influence appraisals at all," says CitiMortgage president Sanjiv Das. "We also know that appraisal is an art form. I will take another opinion to satisfy the customer that two came in at the same level."
Moral of the story? Get a 2nd opinion!
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