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Crazy appraisal on my home

Hey all. I currently live in a mid size town in south Carolina and am requesting some advice on a home equity situation. I purchased my hhomes. December 2011 for $295,000 (put 20%, of my own money down). The appraiser at the time appraised it for $296,000. I recently refinanced in July and took a loan up to 80% ltv. The home appraised for $303,000 at that time. Two weeks ago I started the process of a home equity line application with another lender (%90 ltv requested). This time, an appraiser comes out and give my home a value of $266,000!!! This effectively ended the application as I owe $242,000 on my home. My tax value is $271,000, so it is even lower than that. Has anyone else run into a situation like this?
  • September 12 2013 - US
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Answers (11)

From July 2013 to present, it seems erroneous that your home would drop $37,000. I would get another appraisal. Maybe the last person missed something or was new, or just not the greatest appraiser out there. There could've been possible damage to the property or home values plummeted in your area. There are many variables and more than one can be in play.
Best of luck!
  • September 12 2013
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Given this chart, your value should be approx. 5% greater than when you purchased it, ie $310K, unless you overpaid at time of purchase.

I would get a new appraisal, ie find a new lender. I would not waste my time with a 'rebuttal' on an appraisal, simply apply for your loan elsewhere.

Some lenders are more conservative than others.... the appraisals typically only mirror lender guidelines...

Good luck
  • September 12 2013
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Did you ask the appraiser what he/she based that price on? Was there a recent foreclosure (sounds like it ) 
  • September 13 2013
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Thanks all for the responses. There were no recent foreclosures in my area. I showed the appraiser a copy of my appraisal and be completely disagreed with it. He stated that the comparable that the others appraiser used were not properties of similar nature. However, the homes that he used averaged a at value of around $180,000 and the homes that the previous appraiser used had an average tax value of around $280,000. Granted, my tax value increased after I bought it for $295,000. I just feel stuck because I put down 20%, got supporting appraisals when I purchased, now I cannot get any of the equity out that I put into it. Don't want to keep going to other lenders and get my credit pulled multiple times.
  • September 13 2013
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Some banks and credit unions will use a AVM (automated value model) to determine if your home value will suffice for their equity financing.  In lieu of that, most mortgage bankers/brokers have access to title reports that will show recent comps in your area....which enable a close approximation of valuation based upon comparable values).

Do bear in mind that is likely that a bank/credit union doing a equity line will be more conservative than a first lender because of the higher risk involved.  Rest assured, lenders holding second mortgages lost $$$$$$ during the housing crisis.  It was not...is not...uncommon for a second lender to receive zero from a foreclosure or short sale...and highly unlikely they will receive more than 5 or 10%, at the most.

What is really unfortunate (from both a cost and frustration point of view), is that your lender for your refinance did not do a simultaneous closing of a second loan/line of credit with your new first mortgage.  I have access to a secondary lender who will use my appraisal, the cost is minimal and terms are excellent...sorry, I am not licensed in your area!

Wish you the best of luck!

Deborah
NMLS # 279125
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  • September 13 2013
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Thanks. I would like to have done the second an the same time, but the lender on the first will only do 80% ltv. I won't go into details, but I had to go with that lender. I would think that at the very least the home would appraise for what I bought it for (or higher than the current tax value). I understand that there will be differences between appraisers, but not that much. I guess they used an appraiser that they knew was "conservative".
  • September 13 2013
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 I won't go into details, but I had to go with that lender.

.. and they probably know that... bottom line its their money and they get to do with it what they want. 

Don't want to keep going to other lenders and get my credit pulled multiple times.

IMHO u don't have any other choice...
  • September 13 2013
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Yes
  • September 13 2013
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Ok. Thanks for the advice. Just making sure I am not missing something. Didn't have to put 20% down because of my credit. Just wa the only product offering that they had.
  • September 13 2013
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Ok. One last question for appraisers. Vince, you mentioned earlier that appraisals typically mirror lender guidelines. If that is the case, does an appraiser also try to match an appraisal to the purchase price of a home to facilitate the transaction? Also, the lender I went with for my first is extremely conservative. I would figure then that the appraisal would "match" the guidelines of the lender. Thanks.
  • September 13 2013
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Foreclosures will kill appraised values if they are comparables to your property. Keep in mind appraisors have to use comparables that have sold within the last 6 months . They will always use the most recent properties whether they are foreclosures or normal sales. They will use the closest properties as well.

The only thing I suggest to my borrowers is if they can get MLS reports froma realtor of properties that fit the criteria, you can submit for a reconsideration of value but most of the time they will not be used. Trust me I know this is a frustrating and we as loan officers get frustrated as well because most of us wish to close your loan as well since we are commission based. So don't think the lender is at fault, we want to close your loan as much as you do.

Best wishes!
  • September 13 2013
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