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Got Home Low Appraisal and like to know Meaning of Amounts

So far I have been attempting to refinance my house and every one who actually comes to the house to take pics and appraised it, seems like it never ends goes bbelow the value of the house. I found the following in the report of the appraiser but i need to know more what it means when the amount is in negative versus the positive and how the price of the house is determine. see below:

Location : Average-Leasehold Fee Simple: Fee Simple-Site : 18.99 x 76-View:Average-Design: Rowhouse-Qualitycontruction:Average-ActualAge:60+-Total: 6-Total Bedrooms:3-Bathrooms:1.5Totals:-3000(what this means )-Gross Living Area:-6500 (Why in negative)Basement and Finish:Crawl-Functional utility: Average-Heating and Cooling:HWBB/None-Energy Efficient items:None-GarageCarport:offsite-+5000Patio: None-+1000-Fireplace: None-Additional features:None-+3000-Appeal:Attached-+5000 (Why in positive )Net Adjustment Total4,500-Adjusted sale price:195,500 How they come up with this value-Adjusted sale price : Net adj. 2.4%-GrossAdjusted:12.3%-No prior sale in the last:11/09-11/04-PricepriorsaleTransfer:150,000–243,800-Data Source:   Tax records-Effective Data Source:  10/10 LP $193,163
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January 10 2011 - The Heights
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Answers (5)

Hello Mr. Chahu,

I am a Certified inactive appraiser, in NJ. I Appraised residential and commercial properties from 2002 to 2010. Now I am a Real Estate Associate in Somerset County. If you email me a pdf of the appraisal I will be happy to review it and explain the data and the purpose of adjustments

Unfortunately, a number of appraisers do tend to overlook certain aspects of a local market and certain features of a specific property. That is why it is important to carefully read and understand the value assessment being made that affects your ability to re-finance.


Regards,

George Gervasi

Exit 24/7 Realty
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January 12 2011
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All the anwers were really great, now I figure out those figures and they all make sense to me so far.
Thanks

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January 12 2011
MChahu,

First of all, I'm a real estate agent, not an appraiser however we deal with appraisals as part of the normal course of our business.  Some points to consider that I've encountered from over 10 years of buying and selling real estate personally, and professionally:

The appraisal is an opinion of value.  In general, the appraiser compares the features, location and condition of a home to similar properties to arrive at a dollar figure.

Real estate markets are hyper-local, meaning that small nuances of a market can affect value.  Appraisers that are not intimately familiar with the local market may not be aware of these.

Check the appraisal for mistakes.  Some mistakes I've found in dealing with low appraisals included,

1. Appraiser failed to look at other comparable properties that sold higher
2. Incorrect addresses (big mistake!)
3. features added to comparable properties that did not exist such as  
   properties having a balcony when in fact they did not
4. Subject property having features omitted.  I was selling a condo that
   had two parking spaces but the appraisal gave value for only one
5. Inaccurate gross living space
6. Inaccurate age of the buildings

Talk to your lender if you have a legitimate case.

Hope this helps!

Eddie
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January 11 2011
Hello,
When an appraiser is making -/+ adjustments they are attempting to make your home and the comparable homes listed in the report equal in value. This is called a "Sales Approach" to value estimation.

When a negative adjustment is made, it is due to a feature or condition of that property which is considered by the appraiser to be "better than" your property. When a positive adjustment is made to the report, that reflects a feature or condition of that property which is considered by the appraiser to be inferior to or "less than" your property. 

Examples: 
Gross Living Area -6500
(your home is smaller)

Patio: None +1000
(your home has a patio and that home does not)

 After all adjustments are made, they are totaled at the bottom and then applied to the original sale price of the comparable homes. These "adjusted values" of the comparable homes are then used to calculate the appraiser's final opinion of value to your home. 
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January 10 2011
What they are doing is comparing your home to others like yours that have sold recently and then assigning $ values to the differences.  The end number is what you house is worth based on that sale.  The appraiser then takes all of the end numbers and comes up with a final value for your home.  Hard to say what each value means without seeing the full report.
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January 10 2011
 
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