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Computerized home appraisal & any tips for in-person home appraisal for equity loan? (1 Viewer)

fasteddie_21

fasteddie_21

2006 NM Poker Champ
We are getting a home equity LOC to finish our basement, pay everything off, etc, thanks to home values skyrocketing in the 4 years since we bought our house. We have a realtor here in the neighborhood give us a CMA and there is a near identical house to ours in our neighborhood that's under contract for $415k and other similar comps have us sitting no worse than $400k. I should also note that we live in a ranch on a corner lot to boot. Well, our bank ordered a computerized appraisal and it came in at $359k. Obviously, we are less than pleased with that, so we have the option of paying $550 for an in-person appraisal. This seems like a no-brainer to me, but figured that I'd ask here.

Also, are there any tips/suggestions/things to do/not to do, prior to the appraiser coming and while they're here? Should we spruce up the yards and have the house cleaned well prior to them arriving? The house is in great shape, but would the extra little bit help? Also, would having a copy of the CMA handy help along w/ discussing that the comps the computer used were bunk?

TIA.

 
Come with your own comps and a list of upgrades, along with your estimate of their values.

Use this information to justify why you believe this house is worth "$400k - $415k".

Then let the appraiser do her thing.

 
fasteddie_21 said:
We are getting a home equity LOC to finish our basement, pay everything off, etc, thanks to home values skyrocketing in the 4 years since we bought our house. We have a realtor here in the neighborhood give us a CMA and there is a near identical house to ours in our neighborhood that's under contract for $415k and other similar comps have us sitting no worse than $400k. I should also note that we live in a ranch on a corner lot to boot. Well, our bank ordered a computerized appraisal and it came in at $359k. Obviously, we are less than pleased with that, so we have the option of paying $550 for an in-person appraisal. This seems like a no-brainer to me, but figured that I'd ask here.

Also, are there any tips/suggestions/things to do/not to do, prior to the appraiser coming and while they're here? Should we spruce up the yards and have the house cleaned well prior to them arriving? The house is in great shape, but would the extra little bit help? Also, would having a copy of the CMA handy help along w/ discussing that the comps the computer used were bunk?

TIA.
Click to expand...
I'm an appraiser and every bit helps. A clean house/yard gives me some wiggle room because your home will show well in the photos when the bank looks at them. I'm also driving the neighborhood looking at homes that aren't being appraised so if yours looks good I can do a condition adjustment to support a higher value.

If you can provide comps, that's great I always appreciate them, but remember that realtors aren't appraisers and don't look at homes the way we do so they might not get used. 

Also, being friendly to the appraiser (offer something to drink) and letting him do his job in peace (i.e. not following him around the entire time pointing out the upgrades you made 15 years ago) helps. However, if you have done any recent upgrades or the home has unique amenities then definitely let him know at the end of the inspection. Information like that is very useful to have when trying to support the value, especially if it has appreciated a lot.

 
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Wow, that's helpful, thanks! The home's value has almost doubled since we bought it 4 years ago next month, so yeah, it's gone up a lot. This info is really helpful and we'll definitely 'spruce' up the house and yard prior to the appraisal. Thanks a bunch for that!

 
All good info in here. I was in a very similar spot a few years ago. I wrote down all our upgrades and gave the list to the appraiser and told him to let me know if he had any questions. He took the list and did his thing and it came back $90k above what the bank had originally.

 
@cstunailed it.

A little bit of more general information on the subject....

Most banks will look to do an AVM (automated value- similar to what Zillow does) or a desktop/drive by appraisal first as they are much cheaper than a full appraisal. These can be wildly off as they are heavily driven off of public data on your property and comps. They can have bad data and they don't take into account unknown differences in properties (such as upgrades, etc).

The bank has no control or influence on values. They use to pre-Great Recession but with Dodd Frank there was a wall put up between the bank and the appraisal service. I use to be able to call and talk directly the appraiser and make a case for a specific number that I needed- pointing out information that may have been missed, incomplete or wrong. Not anymore. If a value comes in where it is- unless there is an error that can be pointed out then that is the value. For an AVM that is impossible as there is no data to review. Moral of the story- don't get mad at the bank for what an appraisal comes in at. Trust me, they want a higher value as well.

 
belljr said:
Our appraiser was a ####
Click to expand...
Had my house appraised twice in the last year for refi.

First guy barged in, walked around for like 90 seconds and left without saying a word.  RIDICULOUSLY low number resulted.  Like he intentionally tried to submarine the loan.

Second guy walks in, asks several questions - do I have comps (yes), upgrades in last year or so (yes), let me review his notes and added a few things (rock exterior, deck, etc) - and finally actually asked me flat out what I needed the number to be to make the LTV work.  I told him anything reasonable, I am hoping for xx but xx will work.

He came back at the exact number I was hoping for. :pickle:

 
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matuski said:
Had my house appraised twice in the last year for refi.

First guy barged in, walked around for like 90 seconds and left without saying a word.  RIDICULOUSLY low number resulted.

Second guy walks in, asks several questions - do I have comps (yes), upgrades in last year or so (yes), let me review his notes and added a few things (rock exterior, deck, etc) - and finally actually asked me flat out what I needed the number to be to make the LTV work.  I told him anything reasonable, I am hoping for xx but xx will work.

He came back at the exact number I was hoping for. :pickle:
Click to expand...
That may have meant the value could be higher. Often when an appraiser knows the value that needs to be done or a purchase price and they come up higher they will adjust down to the purchase price or value needed.

 
Chadstroma said:
That may have meant the value could be higher. Often when an appraiser knows the value that needs to be done or a purchase price and they come up higher they will adjust down to the purchase price or value needed.
Click to expand...
It didn't really matter, LTV was fine even with the ahole appraiser.. but I went with the other bank largely because I appreciated the second appraiser's effort.

 
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matuski said:
It didn't really matter, LTV was fine even with the ahole appraiser.. but I went with the other bank largely because I appreciated the second appraiser's effort.
Click to expand...
Well..... no connection to the appraiser and bank so I hope you didn't take less of a deal from that bank because of it.

 
matuski said:
Had my house appraised twice in the last year for refi.

First guy barged in, walked around for like 90 seconds and left without saying a word.  RIDICULOUSLY low number resulted.  Like he intentionally tried to submarine the loan.

Second guy walks in, asks several questions - do I have comps (yes), upgrades in last year or so (yes), let me review his notes and added a few things (rock exterior, deck, etc) - and finally actually asked me flat out what I needed the number to be to make the LTV work.  I told him anything reasonable, I am hoping for xx but xx will work.

He came back at the exact number I was hoping for. :pickle:
Click to expand...
My guy was close to the first but not as bad.  he came in low but not too low. I was only going for a HELOC., I think.

Anyway he comes in, does his thing, Gets ready to leave, I say but you didn't even go upstairs.

He says no need, I have the dimensions from the prior sale. 

I say " We remodeled the bathrooms a couple years ago.  They are all tile now, glass shower, etc.

"Doesn't matter" and he left.

I was like WTF

 
Last edited by a moderator:
Chadstroma said:
@cstunailed it.

A little bit of more general information on the subject....

Most banks will look to do an AVM (automated value- similar to what Zillow does) or a desktop/drive by appraisal first as they are much cheaper than a full appraisal. These can be wildly off as they are heavily driven off of public data on your property and comps. They can have bad data and they don't take into account unknown differences in properties (such as upgrades, etc).

The bank has no control or influence on values. They use to pre-Great Recession but with Dodd Frank there was a wall put up between the bank and the appraisal service. I use to be able to call and talk directly the appraiser and make a case for a specific number that I needed- pointing out information that may have been missed, incomplete or wrong. Not anymore. If a value comes in where it is- unless there is an error that can be pointed out then that is the value. For an AVM that is impossible as there is no data to review. Moral of the story- don't get mad at the bank for what an appraisal comes in at. Trust me, they want a higher value as well.
Click to expand...
Pretty sure the wall was supposed to be up well before Dodd Frank, going back to FIRREA of 1989. 

 
fasteddie_21 said:
We are getting a home equity LOC to finish our basement, pay everything off, etc, thanks to home values skyrocketing in the 4 years since we bought our house. We have a realtor here in the neighborhood give us a CMA and there is a near identical house to ours in our neighborhood that's under contract for $415k and other similar comps have us sitting no worse than $400k. I should also note that we live in a ranch on a corner lot to boot. Well, our bank ordered a computerized appraisal and it came in at $359k. Obviously, we are less than pleased with that, so we have the option of paying $550 for an in-person appraisal. This seems like a no-brainer to me, but figured that I'd ask here.

Also, are there any tips/suggestions/things to do/not to do, prior to the appraiser coming and while they're here? Should we spruce up the yards and have the house cleaned well prior to them arriving? The house is in great shape, but would the extra little bit help? Also, would having a copy of the CMA handy help along w/ discussing that the comps the computer used were bunk?

TIA.
Click to expand...
prior to going the money route, have you tried other lenders?  the 415k under contract, what's the sq. footage?  $/sq. ft.?  what is your sf?  IMO, there are many banks looking to lend that will not charge you for an appraisal, but keep in mind their LTV guidelines, as it pertains to your 1st.  what was the appraisal 4 years ago?  what is tax card value (for reference?).

are you 4 years into a 30 yr or 15 yr note?  instead of LOC, have you considered just refinance/cash out of your first?  have you considered borrowing against a 401k if the money isn't crazy and paying yourself interest?  I think a 401k for HI can be paid over 10 years (P & I).

 
RUSF18 said:
Oh yeah I don't doubt it. Like you, I saw appraisals come back to the penny needed for whatever LTV they're looking for.

Just saying that Dodd Frank wasn't the first shot at getting this "fixed".
Click to expand...
Well, it certainly did "fix" it. There is basically no interaction between the bank and the appraisals now. To a fault.

 
cstu said:
I'm an appraiser and every bit helps. A clean house/yard gives me some wiggle room because your home will show well in the photos when the bank looks at them. I'm also driving the neighborhood looking at homes that aren't being appraised so if yours looks good I can do a condition adjustment to support a higher value.

If you can provide comps, that's great I always appreciate them, but remember that realtors aren't appraisers and don't look at homes the way we do so they might not get used. 

Also, being friendly to the appraiser (offer something to drink) and letting him do his job in peace (i.e. not following him around the entire time pointing out the upgrades you made 15 years ago) helps. However, if you have done any recent upgrades or the home has unique amenities then definitely let him know at the end of the inspection. Information like that is very useful to have when trying to support the value, especially if it has appreciated a lot.
Click to expand...




Chadstroma said:
@cstunailed it.

A little bit of more general information on the subject....

Most banks will look to do an AVM (automated value- similar to what Zillow does) or a desktop/drive by appraisal first as they are much cheaper than a full appraisal. These can be wildly off as they are heavily driven off of public data on your property and comps. They can have bad data and they don't take into account unknown differences in properties (such as upgrades, etc).

The bank has no control or influence on values. They use to pre-Great Recession but with Dodd Frank there was a wall put up between the bank and the appraisal service. I use to be able to call and talk directly the appraiser and make a case for a specific number that I needed- pointing out information that may have been missed, incomplete or wrong. Not anymore. If a value comes in where it is- unless there is an error that can be pointed out then that is the value. For an AVM that is impossible as there is no data to review. Moral of the story- don't get mad at the bank for what an appraisal comes in at. Trust me, they want a higher value as well.
Click to expand...


Good info here, wish we had seen these a week ago. 

We're buying (or trying to anyway) the house we're renting, so it's somewhat a unique position when the appraiser comes to the house the buyer is living in.  My wife was home and I'm sure she was nice to the man (not too nice!) but the value came back ~$11k less than the asking price.  That gives us some room to negotiate but the seller isn't particularly needing to sell (our lease goes another year) so we're left in a position where we either negotiate (we're working that now), pay $11k out of pocket (we can afford it but don't want to), or continue to rent from the potential seller. :tinfoilhat:  In a word, neither of our "BATNA" is bad, but it could be better. 

 
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Just to follow up here...

Our appraisal was last Monday and I took the advice of those that said to leave him alone and have everything printed out. He was very professional and answered all my questions at the end. Having the CMA done gave him a couple of comps that he didn't have and he ended up using them.

In the end, the appraisal came back exactly where we hoped it would and by going thru this process, we added $56,000 to the value that we could use for the equity loan!  :excited: :thumbup:  Thanks to all that gave us great advice!

 
I know this is a general question and varies by area and house size....but I added a bedroom in my home and turned it from a 3 bedroom to a 4 bedroom.

What kind of additional value do you think this added to my house?

I'm getting my house appraised in a few days. I'm not so worried about the overall value, but due to my loan I want this capital improvement to show a BIG increase. Any ideas would be most appreciated. 

 
leftcoastguy7 said:
I know this is a general question and varies by area and house size....but I added a bedroom in my home and turned it from a 3 bedroom to a 4 bedroom.

What kind of additional value do you think this added to my house?

I'm getting my house appraised in a few days. I'm not so worried about the overall value, but due to my loan I want this capital improvement to show a BIG increase. Any ideas would be most appreciated. 
Click to expand...
Well, if I am reading that right you did an addition and not just converted a room into a bedroom. If so, there should be a pretty decent increase in value. You will get a bump for the sqft added and the extra bedroom (assuming it does not make your house extremely unusual for the area). The sqft is the biggest thing because valuations are based off of sqft and then adjustments are made for features on comps.

If you converted a room to a bedroom then you will should see a small bump in valuation.

 
When I did a refi 4 or so yrs ago, the balance of the loan was well under 50% of the prevailing market value & wasnt getting any cash out so the appraiser just did a driveby to make sure the place was still standing. 

 
How much does renovating a kitchen actually add? I've heard all kinds of wild numbers. We did ours recently - put in new granite counters, new floors, cabinets, oven, everything. Old stuff was original from 1976. 

 
Capella said:
How much does renovating a kitchen actually add? I've heard all kinds of wild numbers. We did ours recently - put in new granite counters, new floors, cabinets, oven, everything. Old stuff was original from 1976. 
Click to expand...
Think of it in terms of what sells houses. Kitchens sell houses. A really nice kitchen remodel will tend to have a very high ROI. Now, everything is related to areas and the house. I mean, if you have a 2 bedroom, 1K sqft house in a bad neighborhood- putting in a top notch chef grade stuff and granite everything won't bring as much value back. But updating an out of date kitchen in your average neighborhood will bring a good amount of ROI and make it easier to sell the house when you try to sell.

 
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