- Find a Real Estate Professional
- Realtors®
- Mortgage Lenders
- Home Improvement Pros
- Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- Popular
- Real Estate Market Reports
- More
Answers (9)
- melh2os
- Contributions:10
2 out of the 3 comparables used were short sales, including the one that is in an adjacent neighborhood.
I plan on refusing the pay for the appraisal and if I have to take the discussion to small claims court, so be it.
I refuse to accept that the appraisal process is random, unauditable, and no longer subject to competition or competitive forces. Since I did not initiate the transaction with the appraisal management company, I can only impact the system at my point of contact, which is the lender. They will then have to decide what to do as regards the appraisal.
I plan on refusing the pay for the appraisal and if I have to take the discussion to small claims court, so be it.
I refuse to accept that the appraisal process is random, unauditable, and no longer subject to competition or competitive forces. Since I did not initiate the transaction with the appraisal management company, I can only impact the system at my point of contact, which is the lender. They will then have to decide what to do as regards the appraisal.
- hpvanc
- Contributions:2570
"There were three additional pending sales/listings described which support a significantly higher valuation (closer to $170K) that were ignored because they are pending." Wait until these actually close, and if they close at a value that supports your valuation, then you may be able to get the value you need. Until they are converted to closed recorded sales with an actual sold price, I hope appraisers are not allowed to use them.
- Jeff Kinkade, "Jeff Kinkade"
- Contributions:23
If the appraisers in your area are anything like the ones in mine, they don't like anyone, including borrowers, lenders, agents, to contact them and question anything!
Good luck on your transaction. You might offer to pay for a second appraisal and see if the lender would consider ordering another one for you.
Good luck on your transaction. You might offer to pay for a second appraisal and see if the lender would consider ordering another one for you.
- Call The Sisters, "Call The Sisters"
- Contributions:372
It was my understanding that short sales or foreclosures could not be used as a comp. I thought you indicated two sales in your subdivision were short sales.
The bank does not pick the appraiser. They are pulled from a pool and are instructed not to communicate with the bank, real estate agents or owner.
Since the new law went into effect it's been a roller coaster ride.
Vince has a good suggestion. Find a local appraiser who can look at yours. I'd take a copy and block out the appraisers name in case they are known to the person you are seeking guidance from.
Your might consider paying for your own independent appraisal to challenge the one done for the lender.
The bank does not pick the appraiser. They are pulled from a pool and are instructed not to communicate with the bank, real estate agents or owner.
Since the new law went into effect it's been a roller coaster ride.
Vince has a good suggestion. Find a local appraiser who can look at yours. I'd take a copy and block out the appraisers name in case they are known to the person you are seeking guidance from.
Your might consider paying for your own independent appraisal to challenge the one done for the lender.
- Vince Curtis, "SoCal Appraiser"
- Contributions:4699
Yes, Justin is correct. There is a firewall between the appraiser and lender, causing a lot of problems. That said, you might contact a local appraiser and ask them to look at the appraisal as a courtesy to see if it is valid and accurate, they are the best to determine good comps and hence a good value.
Here is a list of appraisers in your area.
My suggestion, though, as others have stated is to go with a new lender AFTER you are sure that 'low' value is not your real value...
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3421
You can thank the politicians who enacted HVCC for the current method and environment. Appraisal are ordered through a management company, the management company puts out an alert to its roster of appraisers and whoever agrees to do the assignment for the cheapest fee and the fastest turn around time gets the order, and the management company retains the difference.
Lenders and brokers are no longer allowed to hire the seasoned, veteran, reliable and experienced appraisers to perform this vital task. It was felt there could be too much manipulation and conflict of interest with this method.
The lender isn't in any direct contact with the appraiser, there is no "gaming" going on in the value determinations. The roster appraisers are of a lower quality due to the nature of the management company system that was setup.
So, this is why it would not be fair for a lender to be "at risk" when YOU are asking to borrow money. It is not a great system unfortunately.
Lenders and brokers are no longer allowed to hire the seasoned, veteran, reliable and experienced appraisers to perform this vital task. It was felt there could be too much manipulation and conflict of interest with this method.
The lender isn't in any direct contact with the appraiser, there is no "gaming" going on in the value determinations. The roster appraisers are of a lower quality due to the nature of the management company system that was setup.
So, this is why it would not be fair for a lender to be "at risk" when YOU are asking to borrow money. It is not a great system unfortunately.
- melh2os
- Contributions:10
Clarifying points for those who have already replied-
The appraisal only took into account three comparables - two short sales in my subdivision, and one outside my subdivision. There were three additional pending sales/listings described which support a significantly higher valuation (closer to $170K) that were ignored because they are pending.
My point is about her ability to do the job correctly. As stated, she is offering an opinion on the value of the house. How can her opinion be considered valid if she can't compeltel the basic tenets of the job correctly? Researching the right houses, researching them correctly?
As for the other point, the lender stands to make money on the completion of the transaction, they choose the appraiser (or at least the appraisal company), why should I bear the risk of failure in this case? The perverse incentive that was created and continues to be there aside, why should I bear the risk if I have no recourse? I'm not saying the appraiser should not be paid just because the value did not match expectations, but an outright failure to do the job correctly certainly constitutes justification for non-compensation, if not the spector of malpractice.
There seems to be this idea that the appraisal is like rolling the dice, sometimes things go your way and sometimes they don't. I refuse to believe that there is some random input into this equation and that the valuation process is not standardized, formulaic, and primarily predictable. If that statement is not true, then there is something wildly wrong with the system in place. With the information now widely and publicly available, these valuations cannot be considered "black box."
Without providing lenders the ability to game the system (and let's be honest, as long as there is a system, it will be gamed) why would an appraisal with these kinds of errors be allowed to stand, and why would an appraiser making these kinds of mistakes be allowed to continue working without some sort of review process?
The appraisal only took into account three comparables - two short sales in my subdivision, and one outside my subdivision. There were three additional pending sales/listings described which support a significantly higher valuation (closer to $170K) that were ignored because they are pending.
My point is about her ability to do the job correctly. As stated, she is offering an opinion on the value of the house. How can her opinion be considered valid if she can't compeltel the basic tenets of the job correctly? Researching the right houses, researching them correctly?
As for the other point, the lender stands to make money on the completion of the transaction, they choose the appraiser (or at least the appraisal company), why should I bear the risk of failure in this case? The perverse incentive that was created and continues to be there aside, why should I bear the risk if I have no recourse? I'm not saying the appraiser should not be paid just because the value did not match expectations, but an outright failure to do the job correctly certainly constitutes justification for non-compensation, if not the spector of malpractice.
There seems to be this idea that the appraisal is like rolling the dice, sometimes things go your way and sometimes they don't. I refuse to believe that there is some random input into this equation and that the valuation process is not standardized, formulaic, and primarily predictable. If that statement is not true, then there is something wildly wrong with the system in place. With the information now widely and publicly available, these valuations cannot be considered "black box."
Without providing lenders the ability to game the system (and let's be honest, as long as there is a system, it will be gamed) why would an appraisal with these kinds of errors be allowed to stand, and why would an appraiser making these kinds of mistakes be allowed to continue working without some sort of review process?
- Justin Sheftell, "Courtesy Mortgage"
- Contributions:3421
If your existing report is mostly containing comps in your subdivision (except for one), and you are suggesting alternate comps entirely out of your subdivision, then the appraiser response seems to make sense on that topic.
If the report is NOT using the most recent sales data which occured prior to the effective date of the appraisal, that is a major error and should be corrected. Your originator should speak to the management company, ask why that was not picked up during quality control review, and have it corrected and reissued.
If you refuse to pay for the apprasial, you are stating that you wish for the lender to be responsible for the fee. The lender took your application, and cannot grant your loan amount based on your appraised value. Why should the lender lose money there? They have already lost money underwriting your loan that will not complete.
The appraiser simply provided their opinion of value and did the job they were hired to do. Do you think appraisers should only be paid if they estimate the required value to complete the transaction? That sort of thinking was a large factor in the meltdown.
You have three options in my opinion. One is to see if the existing lender and underwriter are in agreement that the appraisal submitted is of poor quality and inaccurate. If so, work with your originator to continue to appeal and correct and update the submitted report.
Option Two is find out if your approval findings allow for a "PIW" at your opinion of current value. Not every lender honors PIW (this is an appraisal waiver). If your findings provide a PIW at your value, you can use those with a new lender.
Third option is pick a new lender and get a new appraisal.
If the report is NOT using the most recent sales data which occured prior to the effective date of the appraisal, that is a major error and should be corrected. Your originator should speak to the management company, ask why that was not picked up during quality control review, and have it corrected and reissued.
If you refuse to pay for the apprasial, you are stating that you wish for the lender to be responsible for the fee. The lender took your application, and cannot grant your loan amount based on your appraised value. Why should the lender lose money there? They have already lost money underwriting your loan that will not complete.
The appraiser simply provided their opinion of value and did the job they were hired to do. Do you think appraisers should only be paid if they estimate the required value to complete the transaction? That sort of thinking was a large factor in the meltdown.
You have three options in my opinion. One is to see if the existing lender and underwriter are in agreement that the appraisal submitted is of poor quality and inaccurate. If so, work with your originator to continue to appeal and correct and update the submitted report.
Option Two is find out if your approval findings allow for a "PIW" at your opinion of current value. Not every lender honors PIW (this is an appraisal waiver). If your findings provide a PIW at your value, you can use those with a new lender.
Third option is pick a new lender and get a new appraisal.
- Brian Goetz, "bri_gets"
- Contributions:295
The short answer is no. Under the new appraisal guidelines, a lender or a borrower can not choose to use a particular appraiser and can not choose to NOT use a particular appraiser. Once an appraisal has been issued, you are stuck with the results.
If you already tried to dispute the appraisal and they would not budge, you are stuck with the value which was given to you.
I have lost many deals because of situations similar to yours.
The only thing you could try is to switch lenders completely and see if a second appraisal would come in at a more realistic number. You would have to pay for that. Maybe contact one of the larger banks or go through your current lender (the one that already has your existing loan)
If you already tried to dispute the appraisal and they would not budge, you are stuck with the value which was given to you.
I have lost many deals because of situations similar to yours.
The only thing you could try is to switch lenders completely and see if a second appraisal would come in at a more realistic number. You would have to pay for that. Maybe contact one of the larger banks or go through your current lender (the one that already has your existing loan)
Disagreement with appraisal/refinance
I owe $197K on a house that was appraised as recently as 10 months ago at $168K. I have since put new siding on the house and improved some landscaping/drainage issues. Have been working with a mortgage lender to do a HARP refinance and have agreed to a rate, been conditionally approved, etc.
The issue is the new appraisal has the house at $145K, a decline that is not consistent with the general market conditions compared to a year ago, and was developed using housees that are frankly not comparable (partially due to a lack of recent sales in my subdvision).
Through the lender I challenged the value and provided additional comparables in adjoining subdivisions that support the higher valuation, in addition to the prior appraisal as further evidence.
The appraisor responded that the comps I provided were not valid because they are outside my subdivision.
I have three issues:
1 - Is the statement valid on its face? Is it legitimate that an appraisal should not include houses from a nearby subdivision?
2 - More troubling is that the appraisal provided uses a comparable that is in fact in a different subdivision.
3 - Most troubling is that the comparable in question that is in a different subdivision has had a subsequent sale at a different price than the one used in the appraisal (the report has a price from a January sale, there has since been a sale in March or early April, which closed before the appraisal was conducted).
A little out of order, but what is my recourse here? Since i did not choose the appraisor, am I able and justified in refusing to accept or pay for the appraisal given the issues as described? Under the new rules can the lender throw out this appraisal in favor of a new one (and I am not paying for two).
If I have no recourse with the lender, can I seek recompense from the appraisor directly?
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.