Profile picture for msrhae

how can I get an appraisal corrected that was done on foreclosed comps and not regular sales?

The apprasial came in at 1/2 of the selling price of the home and the bank will not finance the sale. The regular sales were more recent and equal or higher than the selling price of the home. I am told the "incorrect" appraisal cannot be corrected for 6 months. 
  • October 27 2009 - Castle Rouge
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Answers (10)

Profile picture for msrhae
LOL! Good idea. The only thing that needs paint is the garage door, maybe. It is move in, decorated with paint, recessed lighting, new bath, etc! Those other homes do need about 20k worth of work! And I'm at the age, that I dont want to do a whole lot to move in. But its a great idea...I'm still looking! Thanks!
  • November 01 2009
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Why don't you just go buy one of the foreclosures that apparently are at 20k? 22K can buy a lot of paint.
  • November 01 2009
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Profile picture for msrhae
This is in Michigan. The address is 12950 Beaverland, Detroit, in the Castle Rouge Sub. The asking price is 42k, the appraisal came in at 20k. Thanks all! And cindylapeer, I do really like the home, after the improvements the owner made and I do really need to move, so you really hit the nail on the head when you said "emotional". I am trying to make an informed decision.
  • November 01 2009
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Profile picture for The LaPeer Team
Thanks Roberto! I'm not an appraiser nor do I want to be one!! Makes sense what you said.

msrhae - absolutely get a Realtor to show you comps. Do not overpay just b/c you may be making an emotional decision rather than one based upon fact.
  • November 01 2009
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actually, if distressed sales are a significant percentage of sales in an area, the appraiser is required to use them.

Are you sure you aren't dramatically overpaying for the home? Almost 100% of the time when I see this happen, a home with simply new paint, carpet etc. is being sold for dramatically more than the market would suggest, and simply put, a naive buyer is about to make a terrible mistake.
  • November 01 2009
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Profile picture for The LaPeer Team
An appraisal is an opinion and they can vary. Unfortunately, with FHA, that "opinion" will stay w/the house for 6 months which seems unfair if the appraiser uses inaccurate comps. Can you go Conventional financing instead of FHA? Since you are the buyer, what does the seller have to say? An agent could help you find out if you are overpaying for the house. And I know it's different in other states, but it was my understanding that an appraiser shouldn't use a distressed (foreclosure/short sale, etc.) sale as a comp for a non-distressed property.  
  • November 01 2009
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Profile picture for msrhae
Yes the appraiser was licensed, but I am the buyer and the foreclosed properties were older than the 7-10 of the market value sales I found in the same area. The bank told me the comps I found were more recent than the foreclosed ones used. I want to know if I have another appraisal done, how much weight would it have with the lending institution? or is that an option?
  • November 01 2009
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Profile picture for nealadler
If it is an FHA appraisal, it would have a case number and be in the 'system'.  Depending where you are foreclosures are part of the market and legitimate comps unless they were not comparable in condition, location, square footage and so on.  Most lenders will require appraisers to have at least 3-6 recent closed sales (within the last 90 days), within a one mile or less, and within 20% plus or minus the square footage of the subject.  The would probably want to see some active listings and a few pending sales (in escrow not yet closed).
  • November 01 2009
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. I'm assumoing you are the Seller and this is the worst possilbe information for you.  You have to realize foreclosures are part of the value determination; if the house next door to you was a foreclosure or short sale it is going to affect the price of your house tremendously...all sold comparable houses are considered when appraising a home and right now the appraisers are leaning more toward the lower priced (foreclsures & short sales) homes.  Usually, appraisers can't go back more than 6 months for "comps."  The only thing you can do now is decide if you want to reduce the price enough to work with the offer you have or cancel the contract and wait for another Buyer.  If your appraisal came in at 1/2 the value you want for your home you are probably over priced and the next appraisal will come in substantially less than you want.  You can hire an appraiser to come out and do an independant appraisal; the banks will not use this but it will give you a much better idea of what the true value of your house is right now. 
  • November 01 2009
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You say incorrect, was the appraisal done by a licensed appraiser? What motivation wouls an appraiser have to use older comps?
  • November 01 2009
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