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Why did my appraisal come back so low?

So my wife and I have 3 acres in Blacklick and are surrounded by $300k-$700k homes.  We got a steal on the house and have put a lot of work into it.  We are trying to refi and pull some equity to do renovations.  County auditor just valued it at $232k and Zillow says $245k yet, the banks appraisal came in at $197!? I understand that everyone is more conservative these days but, seriously?  I am in an area where I cant outdo the neighbors and now the mortgage guy wants ME to find comps in the area to try and get the appraisal redone.  His advice is to do a variable rate home equity which i dont want to do.  Not sure why Im the one that needs to do it and also going to have an issue finding comps because im the lil' guy on the block with 2300sq.  Any suggestions?
  • March 24 2012 - Blacklick
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Answers (8)

Its pretty simple. With this HVCC issue, Appraisals are order via an AMC which selects appraisers based on who has the lowest fee. 9 times out 10 that appraiser is not from the area. They still have to contact you for access to the property. If your not with familar with the appraiser that been assigned the order then I would provided he/she the comps.
  • May 06 2013
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Did the appraiser miss anything? I had one before that was leaving a house and I asked him if he noticed the 1\2 bath in the master? He hadn't and went back to have a look and made a note on his sheets.
   I also had an appraiser who came from several towns over and who didn't have access to our MLS system. How could this person pull comps then? Answer I did it for them. You can't persuade them but you can give them evidence. 
  I wouldn't count the Zestimate since it doesn't take into account neighborhoods or views etc...   
 Maybe you should get another appraisal? and try to get some good comps.  
 
  • May 06 2013
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Profile picture for user93282686
Appraised value of a home is a hotley contested issue always, because both the bank and the borrower have so much riding on an "objective" opinion of a third party.  Still, bottom line is that the value is driven by comparable home sales that have recently sold (past six months).  If nothing is selling in your area or if there have been recent foreclosures that have sold at a lower value (short sale) then this will certainly impact the value of your home.  Do not blame the mortgage lender/bank, since they have nothing to do with it.  Under federal law (Appraiser Independence Requirements) origination staff and appraisers aren't even allowed to communicate, in the event there could be undue influence.  If you are very undervalued currently, know that things can change during the buying season when properties do begin to sell and there are more home sales that can be used as evidence to support a higher value for your home.
  • May 06 2013
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Hi Block600,

If you have not done so already I recommend going to a new bank and getting a new appraisal. Appraising is an art not a science so you can have five different appraisers do appraisals on your house and get five different values. Be ready with RECENT comparables within close proximity to you and point out all the upgrades you have done when the next appraiser comes out. Ask for his business card. If you still do not get the value you feel you deserve hire an appraiser to review the low appraisal you got and give reasons why the original appraisal was to low and to supply you with better comparables the appraiser should of used or if the original appraiser made excessive adjustments which lowered your appraised value. Please update us on what you have done I see it has been several months. How did things turn out?
  • August 26 2012
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Profile picture for Appraisal guy
I agree with you. Have the LO order another appraisal and then have someone compentent review the work and decide which appraisal is best. I've completed appraisals where the bank will pick the lowest of the two appraisals regardless of the logic and/or the support of the comparable sales.  I'm sorry that you have to go through this. I wish that the banks could be grown up enough to make decisions like this if they are within reason.  If your bank can't help you, try another bank. I find that the bigger banks are much more strict with their requirements by  telling the appraiser which comparables they will or will not accept.  
  • March 25 2012
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Profile picture for Block600
Appraisal Guy.  I know just because im surrounded by $300k+ homes that it doesnt make mine worth that but at the same time <1 acre lots are selling for close to $100k and I have 3 acres. Question is; why should I be the one need to do the research on comps? Isnt that what im paying the back and appraiser for?  I believe the LO should be doing the work. Maybe I should be focusing on looking for another bank who is willing to work for my business..?  I'm not an appraiser but, also dont think he did a great job. Was in our home 6 mins. Long enough to snap a few pics of the rooms and jot a few things down.
  • March 25 2012
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It's because you have one of the smallest homes on the block. Not sure, but that's what you put. Look for comps that are within 20% of the above grade square footage as yours and tell me what you come up with? Zillow comps may work. Here's what you do. Sort the comps by age and pick all of the most recent sales. Now go online and type in your county and assessors" and find the area where you can research home sales in your area. Now start looking. You have a list of recent sales, you have public records. Find the homes with the same design and square footage. You could also ask a realtor to provide you with the sales you find. You can do this and determine your own home value. If you can find better comps, it will be the only way to change the appraisers mind.
  • March 24 2012
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Look at the Zillow value again, go down the right side of the page until you see recent sales. If those are like properties, sold in the last 90 days, and within .5 miles then send those comps to your LO.
  • March 24 2012
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