Profile picture for kinger10

can a appraiser be held accountable for there numbers?

when building a new house i had to provide my blue prints and cost break down for the build. The bank told me that they look at the numbers to make sure they are accurate and I;m not asking to borrow to much money or I haven't asked for enough.
 If the appraisal comes back and gives me a number of say 550k and my number says 750k to build.  Can I hold the appraiser to his number and go to him and say show me houw to build this house at his number. If he cant show me then he;s wrong and should be held acconabe fo this.  am i correct?

  • November 04 2009 - Southwick
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Answers (3)

Profile picture for blue screen exile
Last time an appraiser gave me a number that didn't look reasonable, I explained to the appraiser why no one in their right mind would believe the number, and he re-did it.  There was no problem.
  • November 04 2009
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Profile picture for The LaPeer Team
You can ask him to show you the comps he used to arrive at his number. He should have it readily available for you.
  • November 04 2009
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The cost approach is just one method of valuation considered on an appraisal.  The approach that usually is weighted the heaviest is the market approach which utilizes comparable sales and/or listings. 

Many areas of the country are in "declining markets" right now.  One of the largest indicators of a declining market is that the "market approach" comes in considerably lower than the "cost approach".  In order words, you can buy a house cheaper than you can build a house due under the principle of substitution if there is an oversupply of standing inventory and/or REO (post foreclosure) properties available.

Additionally if the house you are building is very customized, your cost may be very high for premium upgrades and features, and you may not be able to justify adjustments for those itemes on the appraisal.

Hope this gives you some idea of how the process works, best wishes.
  • November 04 2009
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