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SD601
08-10-2010, 04:18 PM
We had our appraisal for our refinance today, and the guy was here for less than 10 minutes. When we've refinanced previously, that man asked questions about our updates (we have an old house) and my DH showed him everything we have done. This appraiser just took measurements and left after less than 10minutes. My DH isn't concerned, but I'm worried now. What has been your experience with appraisals?

Brady
08-10-2010, 05:55 PM
we had one done earlier this year for our refinance. I found he didn't ask a lot of questions, but I told him of the updates we had done... he took pictures of all the rooms/house, measured and then was on his way. Like you, I was sort of taken aback at the lack of questions, but it seems like in the end all he was looking for are really the basics to just run against similar comps in your area. He came back with our appraisal just based on houses in our neighborhood that have sold with just similar square footage.

MsPeachy
08-11-2010, 06:34 AM
We refinanced earlier this year and had a very similar experience as both of you with the appraiser. He took measurements and pictures both interior and exterior and then found some simliar sized and aged homes for sale in the area and used them for comps and that was it.

Ohana
08-11-2010, 07:14 AM
We just had an appraisal for our refi, and DH said the guy was there less than 15 minutes. He did have to come back a few days later to take more pics (bank wanted pics of all 3 bathrooms), but that took about 60 seconds.

Previous appraisals were just drive bys (appraiser never entered house), so this was much more involved than what we've experienced in the past.

The appraisal made me sad, though. Our house appraised at $100K lower than we thought it would, and only $6K higher than a recent sale in our neighborhood (same builder, similar layout, way underpriced even given the current market). Our house has .5 acres more, plus an extra bedroom and bath, so it was shocking that our appraisal came in so low. Didn't impact our refi, but still sad.

littlebear
08-11-2010, 07:54 AM
Same here. Ours was there for about 20 minutes and just took some measurements and photos. She did have the original plat and floorplan and asked if we had made any major improvements since she noticed that the deck was larger than what was originally on the plat.

jajacobsen
08-11-2010, 08:00 AM
Am waiting to hear about our appraisal, which occurred last Friday. Our guy was here about 50 min total, and took lots of pics and asked lots of questions, most of which were about DH's motorcycle in our basement so I doubt that will help too much - lol!

Ohana
08-11-2010, 08:03 AM
It's interesting that some of your appraisers asked about improvements. In the 8 years we have lived in the house, we haven't done any major remodels, but we've replaced the furnace, water heater, septic tank, and every single appliance (kitchen and laundry). It has cost us a fat ton of money, but most of those improvements are not on an appraiser's radar.

BethIrish
08-11-2010, 08:16 AM
I don't think my DH gave the appraiser a chance to miss our upgrades :) The guy was there about a 1/2 hour, and DH pointed out every single thing we'd done since purchasing 7 years ago, lol.

Of course, this was 3 weeks ago and we have yet to hear back on the stinkin' refi. I'm beyond annoyed about that...

jajacobsen
08-11-2010, 08:19 AM
I did not wait for my appraiser to ask about the improvements, I gave him a short list. Really just the bullet points. But this list was things like "New addition - 200 square feet; Replaced dated flooring on entire first floor with hardwoods; new carpet on enire upper floor; replaced all formica counters with granite in kitchen and all bathrooms, remodelled kitchen, etc..."

I did not specifically speak to new appliances but I assumed that would be addressed when he valued the renovated kitchen. In GA, laundry appliances and refrigerators do not automatically convey with a house so I don't think they would be valued as part of the appraisal. We replaced the hot water heater this spring, and while I think the new one is certainly better than the old, I didn't put it on my list because I don't think you get any additional value for basic replacements or repairs.

Ohana
08-11-2010, 08:40 AM
Rats, we should have had a list for the appraiser! Live and learn. I didn't expect any kind of "credit" for the appliances (since the ones there when we moved in were the original 1978 models, and we went in knowing they would have to be replaced), but the furnace and septic tank were major. We also brought the gas line down to our house, and I think we should have mentioned that, because we are so far from the main road, it was a major expense. Things to remember for next time!

jajacobsen
08-11-2010, 08:54 AM
Ohana - how long ago was your appraisal completed? If it was really recent, you could query it and provide doumentation as to improvements and ask that they reconsider. It may not make any difference and may not be worth the trouble, but it is something to consider.

Ohana
08-11-2010, 09:15 AM
Since we close tomorrow, I think it will be a bigger PITA than it's worth, but thank you for the tip. To be fair to the appraiser, he clearly states that most of his assessment was based on comps in our area, and that's just a crappy way to evaluate our house. There are no houses within a several mile radius that are even close to our house, because of the unique nature of our property. Plus the foreclosure and flip of the house 2 doors down really dragged comps down, so we knew it would be low, just not as low as it was.

SD601
08-11-2010, 02:44 PM
Thanks for all the replies. It's reassuring to know that his limited time is the norm. Luckily, we received our appraisal back today and it came in right where we needed. Refinance is a go!

jajacobsen
08-11-2010, 02:52 PM
We got our answer. Let's just say that despite my list, we got ZERO value for improvements. Fortunately, we have enough equity that we can refinance. Unfortunately, it appears that $100k of improvements (no exxag) has evaporated into the market.

SD601
08-11-2010, 02:53 PM
Wow, that stinks, jajacobsen. I'm sorry.

jajacobsen
08-11-2010, 02:56 PM
And the really stinky part is, that's just the cash we paid. All of our sweat equity is gone as well. I KNOW we are not overimproved for our neighborhood. The market is just really, really terrible here.

Fortunately, we don't have to sell.

Ohana
08-11-2010, 03:27 PM
I feel your pain, jajacobsen! Although we have not sunk as much into our house as you have, we have lost money on this house in the last 8 years, as it has only appreciated (according to the appraisal) a few thousand dollars. Well, we've put waaay more than that into it! Thankfully, we don't have to sell, either. Hoping the market picks up before we plan to sell in 2013!

jajacobsen
08-11-2010, 04:13 PM
Yeah - the loan officer was like - well, it's gone up $8k from your purchase price 5 years ago - not bad considering the market! I'm like, yeah, if we had bought it in its current condition, maybe so. But we have sunk $100k into it to get it where it is today. I didn't expect to get all that back, but I was hoping for $60k in value increase.

ejs
08-11-2010, 11:15 PM
When we refinanced within the past year, we had a drive-by appraisal.

jajacobsen
08-12-2010, 04:31 AM
When we refinanced within the past year, we had a drive-by appraisal.

Which honestly, seems to be all that is necessary, since all they do is compare to comps, anyway. My comps don't have the same upgrades my house does, they just have the same number of bedrooms. I really wonder how much a 4 bedroom, triplewide trailer would appraise for in my zip code - probably pretty close to what I got (or at least that's how it feels right now!!!!)

Really, I could have saved myself a lot of time and trouble and not taken the time off from work to be present for the appraissal (although it did work to get DH to clean up his mess in the basement, so at least there is that...)

LeslieR
08-12-2010, 06:31 AM
Man, this thread is depressing.:( We bought three years ago-I don't even want to know what our house would appraise for now. As far as I can tell, the market is only getting worse here. Not better.

amurphy
08-12-2010, 06:35 AM
We had a terrible experience when we attempted to refinance last October. The "appraiser" spent less than 5 minutes at the house and took one picture. Then he pulled "comps" that were not like our house at all (except they had the same number of bedrooms). One "comp" was on a main road (double yellow line busy) and located behind another house. It was nuts. The most frustrating thing was that despite the bank disagreeing with the appraisal, saying that the appraiser was from the Western part of the state and had no idea about the market just outside of Boston, we couldn't go forward with the refinancing and we couldn't do anything to get back the money we paid the appraiser for his crappy work. With all that said, we just accepted an offer on our house for $80k more than the guy "appraised" it for. :rolleyes:

jajacobsen
08-12-2010, 07:39 AM
amurphy - that you sold higher at least makes me feel a little better. I'm a CPA, I'm trained to be objective and respect "hard" numbers, and while I know I am biased towards my house, I KNOW it would sell higher than the appraisal. The issue in my area is that a lot of less expensive houses (same no of bedrooms) sold in the last few months due to the tax credit, but homeowners like DH and I with upgrades are basically sitting tight. So there are very few higher dollar houses selling at all right now. There are some VERY nice homes in my neighborhood but the owners aren't selling them right now.

All that said, DH and I rationalized the whole experience last night by trying to look on the bright side:

We qualified for the refi, and got 3.75% fixed (ten year loan).
We don't owe very much on the house (only 40% loan to value - cause that $100k came out of pocket - man when I think about the vacations we could have taken!).
And we like where we live and don't have to sell anytime soon.

And for that we are blessed!


But honestly, I don't know which makes me more sick - my home appraisal or my 401k!

dragonfly_71
08-12-2010, 07:47 AM
We had a terrible experience when we attempted to refinance last October. The "appraiser" spent less than 5 minutes at the house and took one picture. Then he pulled "comps" that were not like our house at all (except they had the same number of bedrooms). One "comp" was on a main road (double yellow line busy) and located behind another house. It was nuts. The most frustrating thing was that despite the bank disagreeing with the appraisal, saying that the appraiser was from the Western part of the state and had no idea about the market just outside of Boston, we couldn't go forward with the refinancing and we couldn't do anything to get back the money we paid the appraiser for his crappy work. With all that said, we just accepted an offer on our house for $80k more than the guy "appraised" it for. :rolleyes:

I hope you have a cash buyer. Otherwise the appraisal your buyer's mortgage company is going to do may not come in high enough for their mortgage to get approved for that purchase price.

bluberry
08-12-2010, 10:30 AM
I hope you have a cash buyer. Otherwise the appraisal your buyer's mortgage company is going to do may not come in high enough for their mortgage to get approved for that purchase price. That's what I was coming in to say. Our agent says her biggest issue right now is getting the bank to appraise homes at the agreed upon selling price. Usually, they don't, and then there's the unfortunate situation where buyers usually ask the sellers to come down in price to meet the appraised value. I hope this doesn't happen to you guys...

jajacobsen
08-12-2010, 11:51 AM
I worry about that as well. But it doesn't have to be a completely cash buyer. It maybe someone who is putting a chunk down, so the appraisal is covering the moprtgaged portion, less a cushion for the bank.

Brady
08-16-2010, 05:40 AM
Our appraisal ended up being really depressing also. We put 20% down when we bought, but with our appraisal coming in about $30K less than we paid, we no longer had that equity and ended up having to refinance to a mortgage with PMI (still less than we were paying though), with all the mortgage issues of late too, the whole process took forever with the bank questioning everything about jobs/bank statements/our property (it was a serious battle over our not hooking up to a sewer line and staying on septic), etc. Things I am sure would not have been questioned a year or so ago! Not fun. Our plan had been to stay here for 5 years, but going on 4 years and in the grand scheme of not losing money on our house, we will probably have to extend that plan to a 10 year and hope for a change in the market by then! We were very happy to finally get to closing and put it behind us.

jajacobsen
08-25-2010, 08:34 AM
Finally got a copy opf my appraisal - I feel it was a half-done job. The guy missed counting our rooms. Seriously. Prior to adding a room, we had 8 rooms per the old appraisal: 4 bedrooms, kitchen, living room, dining room, and famil y room. We added a sunroom, which has integrated HVAC, ashingled roof and tile floors. Still, we were listed as 8 rooms. I specifically asked about adding the sunnroom, and there was even a photo of it in the appraisal. I think he was just copying from the old appraisal. There were other small mistakes as well - and none in my favor.

I mean, why did bother coming to the house and doing photos/inspection, literally opening every closet door, when it all end s up based upon comps, apparently?

Our refi is approved but I am very, very jaded.

petdoc08
08-25-2010, 09:01 AM
jajacobsen: I had very similar issues with our refinance appraisal last year. The guy didn't even bother to change the date from our purchase appraisal. I complained to the bank and they said he was the best in the area. Awesome.

We are refinancing again to get a rock bottom rate (4.1% 30yr fixed) and he is coming out again today. I am crossing my fingers he doesn't ding us for my complaining last year. I am hoping for better comps as well. Last time he used a 2 br trailer (for real) because it was the only other acreage property he could find in our district. We have a 5 br custom home. How hard would it be to compare our 5 br to another 5 br and grant us a lot size allowance. Heck, ignore the lot size and just compare the houses that are actually comparable!

amurphy
09-10-2010, 07:00 PM
I hope you have a cash buyer. Otherwise the appraisal your buyer's mortgage company is going to do may not come in high enough for their mortgage to get approved for that purchase price.

The negativity of this thread had made me nervous so I wanted to come back in here to let everyone know how things turned out for us. Our house appraised for $2,000 over the selling price and $82K above the appraisal we got a year ago when we attempted to refinance. The buyers have an FHA loan and are putting 5% down. So there's some positivity for you!

BethIrish
09-10-2010, 07:18 PM
Seeing this bumped made me want to add this: I'm *highly* annoyed that we have to pay Citi, who holds our 2nd mortgage, $200 so they can "approve" the first mortgage's refi. Seriously? Like these bastards aren't making ENOUGH off of us alreay in interest payments?

TracyDP
09-10-2010, 09:50 PM
DH and I have been talking about refinancing our house since we can get our payment down about $250 a month from what we pay now, but the thought of having to clean up the place and get the yard looking decent makes me want to cry. Things are a cluttered mess right now, and our yard is crazy overgrown (not an unusual thing in our rural neck of the woods but still not much "curb appeal"). In reality it would only take one weekend without DD, and DH and I getting our butts busy to take care of the inside, and about $300 to our neighbors son who has a landscape business to get our yard presentable. It's just a lot of work right now. We have a long term goal of buying some river front property, but realistically we could never sell right now so better to refinance to a lower payment so we could rent the house if our dream property came along. Rentals here do pretty well. We came to this decision when we found out the house down the street from us with comparable square footage and property sold for $150k (very low for that property). Not a good sign for us.

udsweetpea
09-11-2010, 07:21 AM
The problem with appraisals these days is that they're ordered now through "appraisal management companies", who are often owned by the lenders. Mortgage brokers cannot have any contact with the appraiser. We have to order through an AMC, who bids out the appraisals and the lowest bidder wins. So you're getting an appraiser who is getting not even half of what he used to get paid and does not want to spend a lot of time at the property.

ambula704
09-15-2010, 10:57 AM
I have a question about appraisals -
We are looking at an older home that has been updated (with everything WE would want in a new home) but has appraised very low, due to all the reasons you guys are stating. We want to buy this house, and think it is work about 30k over the appraisal. We have the chunk of money to do this, but I just worry that we SHOULDNT do it.

We only plan to stay in the house 5-10 years, so I worry about re-sale.

What would you do? I'm afraid if we get another appraisal it might come in lower (the most recent was done within 6 months.)

jajacobsen
09-15-2010, 12:01 PM
My first two thoughts:

If I were staying in the house 5 years, I would nto do it. If I were staying in the house 10 years, I might be tempted to do so. I think the current market will be soft for about another 5 years.

You will need to have a current appraisal because your lender will require one that is current. And, they will likely require that you use their choice of appraiser. Further, they will not loan for more than the appraised amount. So, unless you are willing to make up tehdifference with cash, plus an additional amount your lender requires as margin, you might not be able to get financing.

Other potential buyers will have the same problem. It sounds like the true market value is NOW $30k less than the asking price. I completely understand where the sellers are coming from (I'm in their shoes myself - thus there is no way I would sell now) having spent good money for updates. But that is not being reflected in the market.

Can you negotiate the price downward? It sounds like there needs to be at least a $20k downward adjustment.

ambula704
09-15-2010, 12:28 PM
Thanks, J

Well, they have come down quite a bit already, so I don't think they will. Right now it is for sale by owner and we are friends with the couple, so it makes it a little different than a normal sale. We thought that this price was a "fair price" and so did they - but we haven't talked to our lender yet.

It is hard to be objective because we love the house but don't want to do something stupid financially.