LESSON IN APPRAISAL PRACTICE...OMG!!!

Reblogger Rodney Mason
Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

When looking for comps, its critical that the agent understands exactly what IS and IS NOT a valid comp.

In order for your comps to be usable they should be in the same neighborhood, size, style ( ranch=ranch, split = split), age price range, buying area etc. 

Understanding this one sentence prevents many issues in correctly pricing properties.

 

Original content by Eileen Covington 56005

CHARLOTTE, NC:  So I have  been selling HOMES IN CHARLOTTE for over 30 years and I am an NC STATE CERTIFIED RESIDENTIAL REAL ESTATE APPRAISER, so I don't have appraisal problems...HA and LOL!!!

    Recently I had  an appraisal come in 10% below the sales price on a  CHARLOTTE AREA NEW CONSTRUCTION purchase in  CHRISTENBURY just outside CONCORD, NC north of CHARLOTTE... $50,000 below in this case. The appraiser used 2 sales from 2010  and one from 6 months ago.  I immediately went into MLS wondering how I could have gotten it so worng and immediately found 2 HOMES IN CHRISTENBURY that sold in the  last 2 months.  Both sales were NEW HOMES IN CHRISTENBURY, the same size, same builder, and loaded with upgrades as was my sale. 

Of course, I called the Appraiser right away.  He was not interested in talking with me.  Being somewhat less than helpful he said,

"I never use upgrades in my appraisals".

"Excuse me?, I asked increduously.

"I use the base price", he replied with some irritation

"You've got to be kidding", slipped out of my mouth. "You don't use upgrades when every house in the neighborhood as at least $40,000 in upgrade features?"  He didn't want to discuss it.

So I called the CHARLOTTE MORTGAGE LENDER and the DAVID WEEKLY BUILDER'S AGENT  who had already provided  a pile of comps that more than supported  the value on the house I had sold to the underwriter and they got the thing worked out.   That's a bad appraisal!

Unfortunately if you have to challenge an  appraisal the challenge goes straight back to the appraiser who  came in low and he has to be convinced to change his mind.  That  is a hard change to make.  Since the appraiser has to prove everything on the report , your comps not only have to better than his you have to convince him to use them.  Since the appraiser has access to the same MLS information you do it may be difficult to provide information he doesn't already have. 

In order for your comps to be usable  they should be in the same neighborhood, size, style ( ranch=ranch, split = split), age price range, buying area etc. 

In my case above we were able to convince the underwriter that the guy was out to lunch.  That is not always the case. 

Eileen Howe Covington                                                                                                                  The Charlotte Home Team   

                                                          My Team

The best public search site available to all the homes listed for sale in Charlotte go to:

WWW.THECHARLOTTEHOMETEAM.COM       

Contact me at                                                                                                 

ehc@kw.com        704-451-0688

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Rainer
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Adam R. Cohn
STANDARD MORTGAGE CO. - Delray Beach, FL
We actually get mortgages closed FAST!

Nice reblog thanks for reposting it.

Have a great night.

Adam R. Cohn

Jul 07, 2011 03:21 PM #1
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Rodney Mason

VP of Mortgage Lending - AL, FL, GA, SC, & TN
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