Is there anything more local than doing an appraisal?---Don't ask the "brilliant" large lenders who bring in out of state appraisers to make sure they can prolong the underwriting process

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This actually happened. A client of mine purchased two beautiful lots in the West of Boston suburb of Weston. Weston is probably the most exclusive bedroom community in Greater Boston, and there are homes there with price tags of over $20,000,000. My client's intention was to build the home of his dreams, and he planned on spending $10,000,000 on the project. He would contribute the two lots that he bought for cash, and then he was looking for a $7,000,000 construction loan, after putting $3,000,000 of his own money into the project.

The national lender involved, no names from me, required two appraisals to underwrite a loan of this size. Where did those appraisers come from? One was based in Vermont; the other in Pennsylvania. The Vermont appraiser was able to sift through the data and come up with an "as-built" value which justified the loan. The Pennsylvania appraiser was unable to come up with any comparables in Weston which would make the "as-built" value work. In the end, a local Realtor assisted my client by reviewing listings, and recent sales, which the Pennsylvania appraiser should have discovered on her own.

My point is this. Why do Lenders slavishly insist on using out-of-state appraisers when there are plenty of high quality, honest, and licensed local apprasers to do the work? I know at one time there were abuses in appraising. These were addressed, and licensing has eliminated many of the people whose appraisals were not accurate or thorough. Good local appraisers  know nuances in communities. They know how a home two streets down from another can have an entirely different value even if the floor plans are identical. They know trends; they know values.

I, for one, would like to see appraising returned to local professionals. They have the best chance of developing accurate data, which we are going to need if we ever are going to pull ourselves out of the housing slump we still continued to be mired in


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  1. Michael Mahoney 01/27/2011 11:35 PM
ActiveRain Community
Boston Area Real Estate
Cape Cod Real Estate
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local apperaisers work best

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Andrea Swiedler
Berkshire Hathaway HomeServices New England Properties - New Milford, CT
Realtor, Southern Litchfield County CT

Elliott, you have said a mouthful. I believe they did that just because they knew it wouldn't appraise.. they had a 50=50 chance of not getting the dollar amount, and that is exactly what happened. Even guys from the other side of the state can screw up a deal. Don't get me started, good thing I have to go to my daughters house.....

Jan 25, 2011 10:57 AM #1
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Elliot, we get pissed if they are from out of the District or whatever country we happen to be working in!  First, I don't use any of the national banks, ever!  And when it's my listing, we usually counter with a list of acceptable local lenders. 

And I totally get the nuance thing!  I live half a block west of 16th Street NW in Washington.  My home would sell for about 30% more than a similar property half a block east of 16th Street NW.  Agents who work in my neighborhood go nuts when out of area appraisers show up with anything within a half mile radius. 


Feb 16, 2011 05:31 AM #2
Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

Wow!    I cannot believe they would send someone from VT and then PA....  and Pat's story is equally crazy.    I hope they return to the local appraisers - it's crazy here in lower CT when an appraiser is sent from the Hartford area an hour and a half away to do an appraisal that a local could do in a heart beat and with neighborhood accuracy.

Feb 21, 2011 12:30 PM #3
Adam Liptak
Fairway Independent Mortgage Corp. - Boston, MA

Elliott, Great topic!  This has been a extremely difficult mandate from our government that the lending environment now has to adhere to... involving a third party appraisal management system to oversee the appraisal process.  But it's not just National banks! Lenders and Brokers must involve the same process.  We have a third party management system in place BUT our panel or pool of appraisers that get assigned the appraisals are ALL companies my office has done business with for years and are all LOCAL.  The most important take away is ask your Lender about their appraisal process.  I know my office loves to share our about our system.

Mar 03, 2011 04:30 AM #4
Elliott S. Topkins
Topkins & - Boston, MA
Massachusetts Real Estate and Title Atty

Thanks for the comment, Adam. The Fairway model should be the industry model.

Mar 03, 2011 06:28 PM #5
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Elliott S. Topkins

Massachusetts Real Estate and Title Atty
I need a Massachusetts real estate attorney

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