Appraisal House Blog

Are there any honest appraisers left?
June 14th, 2013 8:49 PM

Today I had the misfortune of receiving two appraisals done by "peers" in my area.  The first was sent to me by a builder who is angry that I am not able to justify his most recent "price increase".  Let me set the stage:

This subdivision started in 2008, but new construction (and sales) have kicked up substantially in the past 6 months.  My property was a 3,800sf 5BR/4BA home on a typical lot, with a sales price of around $365,000.  This is one of the largest homes in the subdivison, admittedly, but just barely; a lot of sales are in the 3,500 to 3,700sf range.
In the past 12 months there were 34 sales in the subdivision, 17 of which were over 3,000sf.  17 were similar 2 stories, 4 or 5 bedrooms, all but two were new construction.  Getting rid of the 4 smallest sales leaves me with 8 really good comps, all within 350sf of mine, all in the same neighborhood, new construction, similar bed/bath count, most of which were built by the same builder.  The ranged from $325,000 to $360,000, with only one over $352,000.  My numbers work out to about $355,000 on my property, around $10k under contract.

So the builder sends me a few pages from a recent sale (done in the past two weeks) by another appraiser.  His value, for a slightly smaller house by the same builder, is $390,000.  Which amazingly supports the $389,500 contract price.  His two main comps?  From a subdivision 1.6 miles away on larger lots and by a superior quality builder.  His two sales from the immediate subdivision adjusted out in the $360's.   

Appraisal #2:
My friends are buying a new house.  Due to a bidding war, they ended up offering $20k over asking price, knowing that they would likely have to come to the table with cash.  Amazingly, for this $520,000 house that they offered $540k on, the appraisal came in at $560k.  The reason?  Well, their neighborhood is a collection of homes built in the '90's, very similar to each other, on about 1/4 acre lots.  The comps?  All from an adjacent subdivision with superior quality estate homes and lots selling in the $600 - $1M range.  So the appraiser completely ignored the 5 sales from the immediate area, and also ignored the 59 sales from the general market area that were more similar in size/age/quality, not to mention every shred of historical statistical data, and just found a few in the area that would "work".  The previous high sale in the subdivision was $434,000.  The most recent sale (similar size, age, one block away) sold for $423,500.  He valued their 9,500sf lot at $125,000, yet decided that lots ranging 19,000 to over an acre deserved hardly any adjustments (several on greenbelt or view lots).  But he MADE IT WORK!  Happy lender, happy life I guess.

What is the point?  Why not just send the lender an email back 5 minutes after you receive the order and say "It's worth it, that will be $400 please"? 

I'm just incredibly frustrated right now.  Are their any appraisers out there that want to do a good job, and take some pride in correctly valuing a property regardless of whether the lender will be happy or not?


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Posted by Mike Lay on June 14th, 2013 8:49 PMPost a Comment

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Mike there are TONS of honest appraisers out there, if you would like to meet some I suggest you join the Texas Association of Appraisers or ATA if you give them my name I will get a a discount when my dues come up next year. I think right now there are more honest appraisers than the typical "numbers hitters" that there were before. I just still can't believe that there are appraisers running around out there doing this kind of stuff. I refuse to perform ANY new construction appraisals these day and the way that TALB goes after people it's only a matter of time before these appraisers are out of appraising. The way the Austin market is now there are tons of sales out there that do NOT support the contract price, I always tell them I "do the best that I can" and that's about all I can do. Please join ATA, it's $100.00 a year and you get discounted CE classes that you actually LEARN in. Happy appraising. Jacob Valverde

Posted by Jacob Valverde on June 15th, 2013 2:33 PM
Yes, its a very tough job to find a right or honest property buyer agent. Your blog must help many peoples to do their job best.

Posted by ann lindner buyers agent on April 30th, 2014 1:13 AM
www.propertybusiness.com.au/

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