Profile picture for DesignM

How to deal with bad appraisals?

We recently had an appraisal done on a 47 year old property we are in negotiations to buy. It's owned in full by my Uncle (I know family sales are the worst) It has been cordial so far, and the house is in bad shape for the neighborhood it's in, but we thought to take it on as a fixer-uper. Well the appraisal got back and it's about 20,000 over what he paid for it 5 years ago, and about 40,000 over what we had basically all agreed upon before the appraisal. The appraisal was done to help us all come to a fair assessment to work a final price off of. Looking at the comps used in the appraisal none of them are recent (the most recent being 3 years old) and one was even from 15 years ago! All of them were sold in different economic up-times and we even knew the owners of one of the houses, and it was sold in immaculate condition and not even comparable in size and finish. Did we get a wack appraisal? Did my Uncle slip someone a hundred? We looked at comps that have recently sold (within the last 3 months) on zillow and they are all listed in the 160-190,000 range in updated move in ready condition. The property are going to buy came in at 210,000 on the appraisal.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 28 2011 - US
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (7)

Best Answer
Profile picture for Pasadenan
No appraiser uses 3 year old comps for present market value.  Something is not making any sense.

Since you hired the appraiser independently, they are not bound by any bank rules.  Usually the purpose of the appraisal is discussed when hiring an appraiser.  There are multiple reasons for back-dating appraisals, usually for inheritance tax purposes or trust transfer estate planning purposes.

It sounds like the appraisal contract was with the uncle, and for a different purpose than you thought and that you just handed your uncle the money.  In which case it is not an independent appraisal, and doesn't give any clue of market value.

It sounds to me that you need to pay for your own independent appraisal and ignore your uncle's appraisal.

By the way, there is no such thing as "free equity".

And if he bought from your grandmother, he likely did not pay market value, so what he paid is completely irrelevant and gives absolutely no information on market value then nor now.

As for the deferred maintenance... that is not the appraiser's job.  You will need to have a home inspection by a qualified home inspector, and may need to get some quotes from some contractors for the required repairs.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 28 2011
Design- LOL. I found this very funny: "Did my Uncle slip someone a hundred?"

If your property is located in California, I can perform a comparable sales report for you at no charge, if you wish. If so, please provide the property address via personal email to my email address. ... Best wishes.

Happy funding, Rudi
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 29 2011
I would ask several local Realtors, from different companies,for a Market Analysis, and take the average of them.

That will be less expensive than several appraisals.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 29 2011
Profile picture for Pasadenan
And if the same model house in the same neighborhood in better condition is selling for $30k less than what your uncle wants...

Just tell your uncle that you are going to buy the house down the street from him instead, and that you can be neighbors since he will be keeping his house.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 28 2011
Profile picture for DesignM
This was an independent appraiser not hired by the bank but buy both of us splitting the cost.The house shows up for 172,000 on Zillow estimate, my Uncle paid 182 for the house in 2006 from my grandmother in full. He thinks he overpaid when he bought it, and the house is in even worse off condition because there has been very little invested into maintaining the house. Our main red flag is that several houses in the area, even the same model, have sold in the past 10 months and were not used as comparables. It's like the comps were pulled out of a file the appraiser had on hand so as to not do any work over the holidays. A house less than .10 of a mile away built in the same year, by the same builder and in the same style with almost identical floor plan but with updated kitchen and finished basement was listed at 172 and sold for 150,000 only 3 months ago. We haven't given them our price yet but they want 180 now (he's seeing it as a way to get back what he thought he overpaid for) and are trumpeting the fact that we would be getting 30k in equity because of the price.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 28 2011
@Brian   Except, they didn't get a low appraisal, they got a high appraisal.
 
Out of curiosity, what are some of the computer generated valuations on the house like the zestimate from Zillow, an eppraisal from www.eppraisal.com, and also try Chase's valuation?

I don't know if your Uncle bribed the appraiser, but I take it from what you said that he now wants what the appraiser said? Wow, if that is the case either get a new appraisal or walk away. I guess you are walking a fine line if you want to borrow money on the place?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 28 2011
Click here for a blog on how to approach it.  You can always Google it as well.

Good luck.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 28 2011
 
Related Questions
The owners has accepted our offer
Profile picture for Jennie Miller, Pllc
Latest answer by Jennie Miller, Pllc
1 hour 24 minutes ago | 6 answers
What are the pros and cons of buying a brand new home?
Profile picture for themorrigan20
Latest answer by themorrigan20
1 hour 43 minutes ago | 10 answers
Looking for a realtor
Profile picture for themorrigan20
Latest answer by themorrigan20
6 hours ago | 25 answers
Why is it so hard to find a Realtor who will respond in a timely manner?
Profile picture for Marge Bennett
Latest answer by Marge Bennett
9 hours ago | 6 answers
Can I offer Cash Bonus to Seller if they accept my offer over others on short sale?
Profile picture for Debra (Debbie) Rose
Latest answer by Debra (Debbie) Rose
18 hours ago | 9 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.