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Two wildly disparate appraisals on a house. (1 Viewer)
- Thread starter Sabertooth
- Start date
Sabertooth
Footballguy
Partially. More like I second guessed myself when the appraisal came in below where I thought it would be.
Rodrigo Duterte
Footballguy
Bumped this after searching for home appraisal info here. This is for a sale.
I was referred to 3 guys. First guy seemed okay, asking for a grand. Second guy is dragging his feet, for no reason, don't like that. Third dude was a total loon, can't believe he was even recommended. The messages he left are hysterical.
This shouldn't be that difficult. Anyway, what do I need to know to find the right appraiser?
I was referred to 3 guys. First guy seemed okay, asking for a grand. Second guy is dragging his feet, for no reason, don't like that. Third dude was a total loon, can't believe he was even recommended. The messages he left are hysterical.
This shouldn't be that difficult. Anyway, what do I need to know to find the right appraiser?
Rodrigo Duterte
Footballguy
I do have a friend that's an appraiser and would be happy to give him the business, but he does not do work in the area and I would think that's important. How much does that matter?
Also thinking about getting two now.
Also thinking about getting two now.
CletiusMaximus
Footballguy
I wouldn't recommend relying on a typical residential home appraiser to determine a sale price if I'm the seller. I would do some of my own legwork on comps, and consult with a broker or two. Residential home appraisers are typically focused on the financing side, not really looking to get a reliable opinion on fmv from a seller's perspective. I suppose they might provide a useful starting point, but that's all it is at best
needanap
Footballguy
What is your situation for selling that makes you think you need potentially two appraisals? Seems a bit unusual.
Rodrigo Duterte
Footballguy
Thanks CM, appreciate the feedback. Comps are difficult for this situation, there just aren't many, and they're not really that comparable, given the location.
Have a real estate broker, but don't trust him completely. Really nice guy, kind of a family friend, but has no listings and other red flags, including knowing and representing the current tenant, who wants to buy the place. He can not wait for the commission. Current tenant is a low-baller, big-time. The lease arrangement proved as much, and he's been leasing in the area for 20 years now, bouncing around, waiting to pounce when the price is right. Shrewd guy, smart, don't blame him at all, but that's not going to happen.
Rodrigo Duterte
Footballguy
I don't need two appraisals, was just wondering if that was something I should do. I got it from the thread topic is all, which I haven't read.
What I need is the right appraiser. Never done this and it's not my home, helping a friend with it. And if you read my reply above to Cletius, you'll see we can't just go with the current realtor and his appraiser at this point. Kind of a conflict of interest there, imo.
The Commish
Footballguy
In my state you aren't allowed more than one appraisal.
needanap
Footballguy
If your broker has presented your friend with an offer from the tenant I would make him enter the property in the MLS and list it for that price and let the market decide. If he does not want to list it on the MLS then he is not looking out for your friend and should be fired. Not sure what state you are in, but in California (probably other states also, but I don't know) if he is double ending the deal he better bend over backwards to make sure he is upholding his fiduciary duty to your friend. Best of luck.
Rodrigo Duterte
Footballguy
Home is in California. What's the law there?The Commish said:
Got another referral this morning, we'll see where this one goes. Had no idea it would be this discerning.
The Commish
Footballguy
no idea....i'm in florida. only reason I know we are only allowed on appraisal is because of our personal experience. we had a home lined up to buy, appraisal was ordered by lending company and came back WAY low and when we asked for a second opinion they said we would have to start the process over completely with a different lender in order to get the second appraisal. fortunately for us, it was in our favor and we negotiated on price more, but I thought it odd.
Rodrigo Duterte
Footballguy
Second quote came back at $1475 with a 10 - 14 day "turnaround" time. Same guy that dragged his feet to begin with.
Heard back from my friend who's been out of the office until today. His assistant was the one that sent me the Appraiser who was bonkers. He confirmed the guy is an idiot and gave me a woman that he would use. So we'll see where this one goes but it sounds much better already.
Heard back from my friend who's been out of the office until today. His assistant was the one that sent me the Appraiser who was bonkers. He confirmed the guy is an idiot and gave me a woman that he would use. So we'll see where this one goes but it sounds much better already.
Joe Mammy
Footballguy
In FL anyone can hire an appraiser and have their property appraised.
If a buyer is using financing then the lending institution will send an appraiser that is selected through a centralized system. If the appraisal comes back above or at the contract price then the buyer gets his loan. If not, then the buyer can break the contract with his financing contingency and any earnest $ returned.
Also, the appraiser receives a copy of the contract before he does the appraisal. Hence, the magic number for the loan to go through is known by the appraiser.
When my RE license was active is was not unusual for appraisers to call me to ask for help on comps.
If a buyer is using financing then the lending institution will send an appraiser that is selected through a centralized system. If the appraisal comes back above or at the contract price then the buyer gets his loan. If not, then the buyer can break the contract with his financing contingency and any earnest $ returned.
Also, the appraiser receives a copy of the contract before he does the appraisal. Hence, the magic number for the loan to go through is known by the appraiser.
When my RE license was active is was not unusual for appraisers to call me to ask for help on comps.
needanap
Footballguy
If your friend just wants an appraisal for his own personal knowledge, he can pay for as many as he likes.
Is your friend just selling to sell? Or, is it a probate/divorce/forced sale?
Why doesn't your friend have the broker list it in the MLS? Is there something unusual about the property?
I don't have all the details, but this transaction seems a bit off.
BTW, my broker is an appraiser and private appraisals start at $350 and go up from there for more complexity. Your estimates seem very high.
belljr
Footballguy
This happened when we bought our house.
We had to pony up cash if we wanted to buy.
The Commish
Footballguy
Lucky for us, the people lived like pigs and the house was pretty disgusting when we bought it. We came down a couple grand and they made up the rest. We're still doing improvements on it. It will be two years this July that we moved in. Still have a kitchen and bathrooms to do.
tri-man 47
Footballguy
Old thread (vs. starting a new one), but a new question. @Juxtatarot, I link you since you know me and seem to understand this stuff.
Quick backdrop: My three sibs and I inherited a small (918 sq ft), summer cottage from my mom when she passed eight years ago. We got an appraisal and used that to buy out one of the sibs. Now another sib is looking to be bought out, and she (and her tightwad hubby) are desiring a new appraisal. With less parties involved, the numbers matter more this time around.
So the appraiser compared our little shack to three comps ...normal stuff. The unadjusted sales price/sq ft on those three comps averaged $281/sq ft. The three comps all show a number of adjustments for lot size, quality of construction, condition, heating/cooling, energy efficiency, garage, decking, etc. They were all bigger & better than ours. After those adjustments, the adjusted sales price of the comparables averaged $222/sq ft. Our appraisal was set at $272/sq ft. ...which is in line with the unadjusted prices rather than the adjusted prices. Obviously, we didn't look at the underlying detail at that time (I know, I know ...).
Did the appraiser make a dumb mistake in appraising our cottage close to the unadjusted prices ($281 vs. $272) rather than the adjusted prices (averaging $222)?? Why make all those adjustments if you're not going to use them, right? TIA
Quick backdrop: My three sibs and I inherited a small (918 sq ft), summer cottage from my mom when she passed eight years ago. We got an appraisal and used that to buy out one of the sibs. Now another sib is looking to be bought out, and she (and her tightwad hubby) are desiring a new appraisal. With less parties involved, the numbers matter more this time around.
So the appraiser compared our little shack to three comps ...normal stuff. The unadjusted sales price/sq ft on those three comps averaged $281/sq ft. The three comps all show a number of adjustments for lot size, quality of construction, condition, heating/cooling, energy efficiency, garage, decking, etc. They were all bigger & better than ours. After those adjustments, the adjusted sales price of the comparables averaged $222/sq ft. Our appraisal was set at $272/sq ft. ...which is in line with the unadjusted prices rather than the adjusted prices. Obviously, we didn't look at the underlying detail at that time (I know, I know ...).
Did the appraiser make a dumb mistake in appraising our cottage close to the unadjusted prices ($281 vs. $272) rather than the adjusted prices (averaging $222)?? Why make all those adjustments if you're not going to use them, right? TIA
Juxtatarot
Footballguy
I don’t think price/square feet is all that meaningful by itself. One thing I don’t like is all the comps were better/bigger than yours. Ideally I’d like to see one the same or inferior. I’d be happy to review it if you email it to me. (Although, fair warning, I have no experience with the Michigan cottage market.)
Juxtatarot
Footballguy
Binky The Doormat
Footballguy
got_nugs
Footballguy
Whew, glad I haven't read this thread before. Yikes with some of the takes in these pages.
RE: the cottage, obviously I haven't seen the report and i'm not in that market but off the top I completely agree with Jux. If we're not talking about a condo or housing in a development where all homes are directly comparable in regards to market reaction to the site location/view/size and additional features such as a pool/interior finishing are all the same, I don't consider the $/sf. That number does not take in to account any of those factors, only the price...and the square footage. I would also be concerned about all comparable properties being superior to your cottage unless there is detailed reasoning discussed in the report as to why those were considered. Did you get a copy of the report?
Your last question is a very good one, 'Why make all those adjustments if you're not going to use them, right?'
