Appraiser code of conduct fails to curb complaints

Photos by Gene Carl Feldman | Ensel and Anderson expected home improvements, such as a new furnace and windows, to pay off with a higher appraisal. Appraisers say upgrades rarely increase value dollar for dollar.

Photos by Gene Carl Feldman | Ensel and Anderson expected home improvements, such as a new furnace and windows, to pay off with a higher appraisal. Appraisers say upgrades rarely increase value dollar for dollar.

Eager to take advantage of low mortgage rates last year, Angie's List members Ellen Ensel and Fenwick Anderson applied to refinance their Takoma Park, Md., home. The deal fell apart when their house appraised for only $310,000 — $130,000 less than they expected.

"I'm still really infuriated," Anderson says of what he describes as an unfair appraisal, especially in light of the couple's $60,000 investment in major improvements.

They appealed to their bank, Bank of America, but say no one visited or requested more information. Without further explanation, the bank denied the refinancing request months later.

Appraisal complaints have skyrocketed in recent years, due in part to the housing market's instability and new industry regulations, says John Brenan, director of appraisal issues for The Appraisal Foundation, which sets national standards for appraisers. That's also evident on the List, where 26 percent of all reports on appraisers in 2010 received a D or F rating.

The problem, Brenan says, is that lenders and borrowers now have little say in who appraises a specific property. Prior to the housing fallout, lenders could choose their own appraisers, and appraisers say they were sometimes pressured to overvalue properties.

In response, Fannie Mae and Freddie Mac adopted a code of conduct in 2009 that gave the power to choose appraisers to unregulated appraisal management companies. Previously, lenders rarely used AMCs.

But the new code spawned another issue. "The proliferation of AMCs created a much bigger problem because they look for the cheapest and fastest, not the best appraiser," Brenan says.

Louisiana-based appraiser Sara Stephens, president-elect of the Appraisal Institute trade group, says the emphasis now seems to be on quantity, not quality. "Many AMCs are asking for one-day turnaround, which is not much time to come up with an accurate value," she says.

As part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, states must regulate AMCs starting in April.

Bill Seward, owner of highly rated Seward Real Estate Services in Indianapolis, says he earns about half of what he used to on each appraisal since the AMCs now take a cut.

To make up the lost income, he says he must do more appraisals in a shorter amount of time. "There are a lot of rules and regulations that force you to not overvalue properties — that's good, but consumers can have unrealistic ideas of the value."

In their report submitted on Angie's List, Ensel and Anderson say they don't think their appraiser, Terence King of poorly rated King Property Group in Clinton, Md., knew their neighborhood well because he compared their four-bedroom home to a condemned house undergoing rehabilitation. King, who claims 10 years of experience, declined to discuss the couple's home, but says the bank had multiple appraisers review and uphold his appraisal. Bank of America did not return calls seeking comment.

Homeowners who disagree with their appraisal have little recourse, Brenan says. If it has errors, ask your lender for a review or new appraisal. If that fails, file a complaint with the state licensing board. "If people take it to the state board, it will weed out appraisers doing a bad job," Brenan says.


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Comments

When is the working class ever going to get a break! The more we try to save and do right all we get is turned down. We tried to refinance our loan and all was going great UNTIL A LOW APPRAISAL came in I MEAN LOW.. All because the market.. We were SHOCKED to see the amount.. Why even come through the house nothing matters what the house really is. To compare what has sold... That's so unfair to families that work hard for a living and can't get a break. Something needs to change. And refund all the appraisal fees back because they are making a fortune.

Cost does not = value. Just because you remodeled and spent $60,000 dollars does not mean the value of your home has increased by the same amount. If i have a car and need a new motor and the cost is $3,000. Does that mean a similar vehicle with low miles is lesser in value after you put the new motor in the car. No as it might be a over improvement for that make and model. Its the same with a home. The appriasers dont make up the comps with similar features, condition, quality and size. The market is dictating the value. Thee problem is the realtors who are saleman and all they care about is the commision and not the buyers best intrest. I have purchased 4the homes in my lifetime and never once heard a realtor say lets pull up the sold comps as well as the active listings and lets see whats going in in the neighborhood. Realtors alwaysto say we better jump on it. The listing realtior told meme theres a lotto of intrest. Maybee buyers and sellers should be questioning there real estate agents.

Not much else to say other than the problem is still there. Nobody cares about you. The bottom line is always the issue. Now, why a bank would not lend it to someone who has a perfect credit history? Easy...they can make more money in the market (despite the volatility) than lending at 4-5%/ year. DO they care about the risk? NO! They know that they will be funded by the gov or the entire system will crash. We need to borrow directly from the government like the banks do and with proper back checks so the banks can use their money to clean up their own s.....!

Is it legal for the appraisal company to charge more for the appraisal than you authorized? I signed a $450 authorization with my mortgage agent to draft $450 from my checking account for the appraisal but the appraisal company charged me $525. It may be a small amount but I dont like being taken advantage of. Can I file a complaint with someone?

Civics;Economics;Finance; anyone? It seems as though our educational systems failed most of the members who have commented on this site. There is clearly an unusual number of respondents, and many other Americans as well, who are not able to distinguish between the responsibilities and the roles of the Office of the President, the role of Congress in passing laws that we live by, the implementing agencies i.e. HUD, to carry out the laws passed by Congress and approved by the President,and the impact that economics play on our day to day spending activities, whether its housing, clothing, electronics, etc. Add to that that our educational institutions have systematically removed the studies of the role of commerce (Wall Street) and finance(the FED) and how those institutions play out in a Democratic society. No one person is responsible for what we are experiencing in this economy and the ensuing downturn...MOST OF US ARE.. Too many of us payed too much for our properties without calculating or researching the potential impact of the loss of income or a downturn in the economy. And too many of us bought too many other goods on credit without calculating the exorbitant interest rates on carry-over credit. Let's face it we "bought into" the notion of deserving to enjoy the American dream for ourselves and our families" never ever thinking that we would again experience anything near the Crash in the '20's. Like was that in our history or social studies classes? Did we know or remember the role of HUD aka Housing and Urban Development, its history and its Congressional mandate to make housing affordable for most Americans? Hud was created in the '50's and focused among other things,in providing finances for housing at reasonable interest rates for veterans with almost no assets returning from ww2 W/vha.The Veterans Administration can vouch for millions of new housing and educational grants that helped contribute to the growth of the American middle class. Add to that scenario the growth of the then hard working middle class citizens wanting to build equity for the future. How fervently did our citizens, banks, and politicians buy into the notion that real estate was always going to be an asset even as it was a temporary liability? All of our political government administrations, Republican or Democratic always included a mix of both parties who championed the interest of both lenders at some point, borrowers sometimes jointly and at times depending on campaign funding. The appraisers are truly the little guys in this scene floating in the lowest tide far below the Wall Street-ites,who get by. If there is one true lesson to learn from the past decade it is that our children and the next generation must truly be better informed about the historic, legal and constitutional role of government, economics, labor, finance, and corporate interests. according to a litany of critical, not one sided, perspectives. Blaming Bush, Obama, Clinton, Reagan, etc. is too simplistic and irrelevant. These are difficult economic times for jobs and housing. For the future though all is not lost. There is a least quotient that we can consider. We can re energize and again promote a serious study of the institutions and organizations that implement the policies that we live by.They must be honorable pragmatic systems that will help us avoid the corporate greed and citizen ignorance that helped to perpetuate the present state. We can start by building an educated citizen-responsive curriculum in our elementary schools and institutions of higher educations. We can be the captain of what we know or the victim of what we don't.

If you disagree with an appraisal, be sure to look it over carefully. We had an appraiser undervalue by more than $100,000, but noticed he had completely left out a full bath and a bedroom! We encouraged the broker to get a refund, which the appraisal company gave, once they saw how inaccurate it was.

To Brien, I agree with you. B of A is the worst for any customer service. EVER!!

Angie, you may want to police this comment list a little more closely. I'm thinking of joining, but would be disappointed & probably quit if the members commentary was not well managed. While there are a lot of thoughtful & informative posts here (even from some folks who are rightfully quite frustrated), there are also some posts here by the angry teenagers living in their parent's basement. One post starts out "What a bunch of morons you all are." Some others are just as abusive, without the adolescent language. We were recently surprised (while doing a re-fi on our home) by an obviously shoddy appraisal that was about 10% low. (Thankfully, we have enough savings to bring to the table to do the re-fi anyway). We are working through a mortgage broker, and requested another appraisal as a second opinion. The mortgage broker actually offered to reimburse us for the second appraisal (we didn't take them up on it ... it's not their fault). Based on the comments posted by those who identify themselves as appraisers, there are some really good ones out there, and some that don't have the maturity to be in this line of work and ought select a different career path. Given the current environment, I think every appraiser out there needs to reflect on the seriousness of their responsibility. Undervaluing a home, by even a small amount, could cause someone already struggling financially to be unable to obtain a re-finance they need, or to be able to afford to sell a house they need to sell. Some of these people will end up losing their homes and be tossed into financial wreckage because of this. If a homeowner challenges your appraisal, you should be ready to take the time to consider everything they have to say, think through the whole appraisal again, and even confer with a more experienced appraiser, if there's any question at all.

The appraisal is based on comparables in your neighborhood that have recently sold. The only appraises for what the market will bear.

Bank Of America did us the same way. WE have four bedrooms and they said we had three..or their appraiser did...we have put 100k into this house which was new when we bought it almost six years ago, including building an all brick third garage separate from the house which already has two car garage attached. It is an all brick home with 2840sq ft. granite, stainless steel, vessel bowl sinks, the works...BOA is screwing many many people. I would not do business with them again ever and encourage everyone else to steer clear!!!!!

Borrowers need to demand, up front, that the lender use a competent appraiser. Demand that your appraiser have a college degree, a professional designation, and at least ten years experience appraising in your neighborhood. If the lender won't agree to selecting an appraiser with those qualifications then go to another lender.

Everyone seems to want to blame ONE individual (or category of individuals) as to the problem. There are multiple sources to "the appraisal problem". I'm not an appraiser, but I just finally refinanced last week. Was I happy with the appraisal done for the refi? No, I wasn't. I had purchased my house Jan 2010, AFTER the bubble burst. I sunk about $20K into upgrades, such as fencing in the backyard with a new vinyl privacy fence and a 10'x16' custom shed, replaced the older gutters with new gutters and gutter helmet-like system, added insulation, etc. Of course, I didn't expect to see the value of the house increase by the amount I invested - but I was pretty upset to read on the appraisal, that brand-new gutters, brand-new fencing and custom-made sheds didn't add a single penny in value. Neither did a brand-new roof with transferable warranty. Per the appraiser, those items in NEW condition are considered "expected" and marked as "average" condition. He also discounted space that is partially below grade. When I bought my house, it was listed with 3,000SF. The appraiser downgraded it to 2,400 square feet and subtracted a bedroom that was below grade because it didn't have a built-in closet. I ended up getting the refi, but to get PMI out of the refi, I had to come up with several thousand dollars more than I expected to.

What a downward spiraling mess. New appraisal guidelines tie appraisers hands, forcing them to use comps in close proximity and date when often better valuations could be obtained by expanding the box. The best homes with the finest improvements are given minimal credit for fear the appraiser will be called out on a reevaluation by the lender. These are administration policies set by Fannie & Freddie. Add new RESPA guidelines where repair credits can't be escrowed and lender guidelines that are further tightening on a monthly basis, and you have the current recipe for disaster for the housing market. The Banks (who we just bailed out) can't lower the interest rate on existing customers with good credit because their home won't appraise. It's all about profit. I attempted a short sale with Select Portfolio. Got a $310K contract after several months of marketing. They sent out an agent to do a BPO who in turn said we sold if for too low. Dlj Mtg. Cap Inc.took a deed in lieu a few weeks later. 4 months pass, The bank sells it for $280K after doing numerous repairs. The greed that once supplied the mortgage banking industry has been replaced by stupidity.

I really know how this feels. We were in the same boat. Lucky for us, we didnt HAVE to refinance, we were just doing it in attempt to save money with a lower rate. Good credit and the like did not matter. Our appraisal like the article came back over $100k less than we thought - and the appraiser did not even have the right information, the right number of bathrooms and bedrooms, and not to mention nothing on improvements or even a peak inside. They also used comparable houses that were not anywhere near as new, or the same size as our house. In fact, I was able to come up with several more appropriate comparable houses myself. But they didnt care. What can the consumer really do in that situation? NOTHING. Hope to get lucky if you ever have another appraisal and get someone who knows how to count? Hmm.

I am so sick of appraisers. In the last three years we refinanced and then added a home equity loan. We have one of the largest homes in the subdivision. In the last year we saw our value drop over an additional 75k between two appraisers for refi. this then dropped our home equity loan which was just approved 8 wks previously! No addition was given to our all brick home compared to a cedar sided home. Everything was upgraded. we have a larger lot backing up to woods. The per sq footage used on the alt method of appraising was giving us 65.00/sq ft in the Midwest..are they nuts. In comparing our home to others they used homes 6 miles away, when they subtracted for sq footage the dollar amt per sq ft was not the same as when we were the bigger house and given extra credit. I could go on and on . I became so mad I would have loved to tell them where to go. Yes, there really is no recourse because no one will do anything about it and they are pulling in people from way out of the area to appraise areas they are not familiar with. They don't even drive by the comped homes in the same neighborhood! ENOUGH

I had a condo at LaJolla in 2005 that was appraised by an approved appraiser of COUNTRYWIDE MTG. Not only the appraiser took a phoptop of a different unit, COUNTRYWIDE overcharged $85 appraisal fee than what they paid the appraisal company! This is how corrupt the lenders are.

We too have tried to re finance to capture the lower rates and the appraisal has been way off it appraised for 15 thousand less then we owed on it. We not only had to pay for the appraisal we could not refinance. Having to many foreclosures in my area prevented us from re-financing which is sad we have good credit and we pay our bills why should we suffer?

I am also an appraiser and see both sides of the situation. I do give value to the upgrades and renovations a property has but have a home myself that is worth much less than it was before the meltdown and lost my line of equity. By the was the current administration does suck and is responsible for the downfall of this country.

This financial destruction of America would not be possible without directives for the White House....

@EM. You're kind of rude for an appraiser. Theones I know make professional attitude and composure a standard. You're probably an independent, with accounts at several banks. All of whom want you to make the numbers work. I won't bore you, or anyone else her by repeating what others have said already. OHTW: "This administration"? Were still running on the Bush tax break prosperity, which the present administration has tried to remove. Don't blame someone else if you missed your guess.

Too bad the tax appraisals aren't as low as the refi's.

Looks like a good place to plug my book: Public Trust Betrayed: The Truth Behind the Real Estate Appraisal Industry.

Appraisals are coming in low all over the country! I live in california and just had a low appraisal on an reo property. Hopefully when this happens the seller or bank will be willing to work with you to come to a solution . I was fortunate as the bank did work with me. Sometimes they won't. It is difficult times right now. Buying a home has became much more difficult due to these low appraisals! Hopefully things will improve in the future!

To Jason Dennis: I agree with you for the most part, but there is a contradiction. About appraisers, you said "They do not now the market. They only know data." (I assume you meant "know the market", not "now the market"). I agree 100%; the appraiser needs to be objective, and make scientifically based +/- adjustments to come up with a price. But earlier you also said: "..shouldnt even be doing appraisals in cities they are not use to.." -- well if the appraiser doesn't need to know the market, why can't he appraise in a city he is not used to? Do they have to know the market, or don't they? You seem to be contradicting yourself. I agree with your first supposition: appraisers should and MUST know data. Not "the market". In fact, I would trust an appraiser from outside my geographic area more than one who lives next door. Why? Because those who appraise where they live can NOT be objective. They will allow their own personal gut feelings about their own neighborhood to interfere with their better judgment. So yeah, data is what it is all about. Not so-called "knowing" the market.

Too many people think their house is the Taj Mahal. I’m sorry folks but sometimes a house really is just ‘average’. You say you take pride of ownership, “and it shows” – but that is what average is, you should ALL take pride in ownership. THAT is average. The worst are people who put big dollars into renovations and then have an inflated opinion of how much that reno added to the market value. It ain’t 100% folks. You never increase the value of your home by the value of your reno. Even the best R.O.I. – kitchens – are lucky to add 75% of the reno expenditure to the house’s value. Most of the time, the reno simply helps to sell the house faster.

Everyone is pissed because their home isn't worth what they thought it was. Well, newsflash people the bubble bursted long ago. Get over it. Back during the boom there was pressure from brokers to hit a value. Brokers are on commission. The realtors on commission. Of course they will tell you that there are problems with appraisers. EVERYONE wants the appraiser out of the transaction so the deal will work every time. Even appraisers are throwing other appraisers under the bus because they had big broker business before the bust and the HVCC. I wish they would take appraisers out of the picture for a few years and let the homeowners, AVM's, BPO's and whatever the hell else they want to let pretend to know what the hell is going on and 10 years down the road the appraiser will be respected once again. DO NOT beleive this BS propaganda people. Appraisers are keeping some of the hogs from getting fatter since they can now honestly appraise without pressure and they will go to no end to put a stop to it. All LIES!

These years have been totally chaotic, crashing, value dependent only on what a buyer is willing to pay. Nonetheless, Appraising can't be much of a "profession" when each lender requires their own "trusted Appraiser." You'd think with standards, two licensed professional Appraisers would come up with similar valuations. Maybe it's this non-market; however it's an old problem.

We refi-d last year. We had the same issue. We had come off a MAJOR remodeling of the entire house which included bringing the entire house down to the studs and re-doing EVERYTHING, including the roof, siding, electrical, heating, we did high-end bathrooms and a 75k kitchen. The first appraiser we had was rude, inconsiderate, didn't want to hear anything about the remodel, told me to get out of the way so he could take pictures, told us he couldn't take into account any of or remodeling efforts, and just because we upgraded everything, and EVERYTHING was new, didn't mean our house should comp against similarly remodeled houses. He used houses that were un-remodeled POS houses. and our appraisal came in VERY low because of the comps he used. We couldn't refnance because of the appraisal. We went to another bank to try again, and we put up a BIG stink about getting a local appraiser to do the appraisal. We won on that account, and the guy who came to do the appraisal listened to us, and took into account all the work that was done on the house. at appraisal came in 60k HIGHER than the first appraisal because they used comps that were similar to our newly remodeled house. There are a lot of bad appraisers out there only trying to make a fast buck and not caring about their finished product.

John, Maybe because you are an appraiser and know the TRUE value of property in the area, you are trying to get the seller to come down 10-12% for your own benefit

Hey cLAIRE RYDER, When an appraiser lists land worth 1500. an acre and it sells around here for 20k plus... there's a problem!!! Also when they use active listings in another county 15 miles away, when there are active in the county 5 miles away, theres a problem!!! So YES we blame the appraisers!!! This many people can't have issues and there NOT be a problem!!!

everybody complains about their home value but nobody said what homes in their neighborhood should have been used...just that the appraiser must be wrong....well until someone shows someone superior data....shut up or sit down!

I'm also a real estate appraiser. I will not work for Bank of America due to the way their Appraisal Management Company treats appraisers. I normally charge $350 to $400. BOA would rather send in an appraiser from an hour away that will do the job for $225. You get what you pay for.

Don't shoot the messenger. Inflated valuations is what helped get us into the present mess. Don't rush to judgement over an appraisal based SOLEY on a low value that was less than you expected. There may be a chance after it's all said and done that you may be thanking that appraiser some day that they were HONEST. The general public has to be aware the HIGHEST VALUE is not necessarily the real value, nor does COST NEW equate to market value. It's far more complicated.

It appears that the only reason people are complaining is because their appraisal was lower than they needed to get a loan, is this not true? The appraisal process is certainly not an exact science and the industry is permeated with nepotism, but it is the bank's money to lend after all, not the loan officer's and certainly not the homeowner's. There is no law preventing one from getting a loan from a separate lender, so what is the real issue other than not getting one's way?

What a bunch of morons you all are. One reason this country is in such a financial mess is because 4 years ago homeowners and their partner in crime the loan officer chose the appraiser and stated what the value had to be for the appraiser to get paid. Just for kicks, try doing that when you buy and finance your next car. It's your own mess homeowners, good luck when you try to short sale your home, I'll get a good deal on it.

What many people do not understand is that the concept of 'value' is really subjective. Practically everyone has a unique view of what their house should be valued at. Furthermore, comparables which are used to 'value' a house are often chosen to support a preconceived 'value' in the mind of the appraiser.

Sounds like many folks are out of touch with reality. Do a little research on the "shadow market" and race reality. You got cut up in a bubble. Walk away and cut your loss. Thank God we have some sort of regulation over appraisers. They were one if not the largest reason we had a bubble in the first place. What the heck were they doing appraising homes at double in 4 years time? Come on folks... Wake up and smell the coffee.

Just because the homeowner has done work it does not mean that the house is worth that dollar for dollar. I am a Certified Appraiser too. Stop blaming the appraisers. Have you ever heard "over improved for the area"

I had a ‘drive by’ appraisal a couple of years ago that got the square footage, the number of rooms and the effective year of construction wrong. (1400 vs. 1900, five vs. seven, and 1956 vs. 1993) Needless to say, I complained about this to the lender and sent a copy of a legitimate appraisal done several years earlier. I received a form letter that basically said the appraisal is what it is. So, basically, I will never do business with Morgan Stanley again.

Where to start? This aticle leaves out to many details to even comment on whether it was fair or not. If it was an appraisal, Im assuming the condemned property was sold. If it fits sq ft, location, condition, and seller motivation it doesnt matter what the status of it previously was. Sounds to me it was a good comp. There is no doubt appraisals are a problem. Many appraisers got by on appraising per contract. With that being said if you bought your home for $150000 per contract it doesnt mean I couldnt get an appraisal at $130000 or even $170000 with a contract. Now that there is regulations these same appraisers have no idea how to appraise a property. Many of the good appraisers are so upset over having to fight the AMCs(to those of you who dont know an AMC is a third party that conntracts out appraisals. So instead of appraisers getting appraisals directly from the source, they now get it from third parties who do take a huge cut for just contracting out)they are not doing as much research to complete the appraisal. You also dont know where the appraisers are coming from. Many of them started covering larger areas to supplement their loss of income. They shouldnt even be doing appraisals in cities they are not use to. Bottom line is this Clinton passed a law that forced banks to do subprime loans. Im not a BUSH fan but the economy isnt his fault. Clinton is the one that passed the law. Obama enforced the law when he was in Chicago. Google Obama sues citifinancial. It was subprime that killed the market. If you can barely afford the home you do not need to be buying it. If you didnt use an intelligent Realtor(as apposed to a salesman) you should not have bought the property. Majority of the Realtors are salesman honesty is hard to come by, appraisers do not sell the properties, they dont work with buyers, they dont price the properties or bring the contracts. Other than gettinga nonbiased third party value for lending purposes I do see a need for appraisers. They do not now the market. They only know data. They dont know that John and Susie bought a home because they saw a group of kids playing football in the street and they thought it would be perfect for their children. Appraisals are going to continue to be a large problem until the economy gets better and that falls on the government not appraisals. The minute the government told banks they have to give loans to people that dont deserve them is the minute our economy crashed.

I refi'ed my house last year to take advantage of lower interest rates. The appraiser sent wasn't even from my county. He didn't listen to a thing I said, just told me to get out of the way so he could take pictures, plus he was quite rude. The thing that irked me so much is that he 'compared' my home to one not even in my neighborhood. What irked me even more was that he listed my house as 'average'. Yeah, average, with a new roof, gutters and downspouts, brick walkways, brick patio, covered screened in deck, fully finished basement (he said he couldn't count this as additional square footage since it was below grade)...but the worst was the term 'average'. I take pride in ownership and it shows! BTW, I got the loan anyway.

It's sad to hear that Ed lost profit due to a faulty appraisal. But what in the world does it have to do with "the present administration"? Kindly recall that the damage was done during the Bush's laissez faire years.

We too tried to RFI in 2010. 246k for the new 2007 construction house. We invested 105k put down in 2007, 15k cash additions of patio, cover and security shutters (rolling), on a golf course fairway and valued at 125k. Homes NOT on the course without the patio, patio cover and security shutters were the same appraisal. When questioned the appraiser said he cannot account for the land, additions just the base house.

Its worse than most think. I'm a real estate agent who does understand the appraisal process and market conditions. That doesn't excuse two appraisers appraising the same property and coming up with a 20-25% difference in value, just 2 weeks apart. It happens all the time and keeps folks from selling. The review process is a joke as well. Quick turnaround should never be a pressure on an appraiser and I don't know of any lender that presses for 1, 2 or even 3 day turn arounds. It generally takes a week or so. I'd say the qualifications to be an appraiser need to be higher - won't even go into the spelling errors on an appraisal report.

So, if you're considering a re-fi - what to do about an appraisal ?

Would you loan money for a house? Prices continue to fall in Georgia, at least a third of baby boomers do not have enough money to retire and are expected to have to sell their home to raise money for retirement, and nationally 27% of mortgages are underwater. There is a high number of properties on the market now and will be in the forseeable future. Would you want to base your financial security on a house? I don't think banks really do either. Consequently, the delays, foot dragging, and deflated pricing for appraised properties. They are keeping a "safety gap" for further expected decreases.

There's a bitter, ironic flip side to this appraisal nightmare: property tax assessment appraisals. Here in Rhode Island, re-appraisal is mandated on a regular basis, and a single firm, Vision Appraisal, services the entire state. The last revaluation was done as of 12/31/2008, and is assumed to be 100% of fair market value as of that date. Comparables are a knotty problem in Newport, where I live - the most densely populated part of the city is also a historic district, and inflated sales prices in the area negatively impact the valuations of those of us who have lived in the same home for many years, as I have. Add to this the fact that the Vision appraisers have no local knowledge of this specialized area, which means they routinely compare apples with oranges. Further, their data is often in error. Following the last reappraisal, I, along with many of my fellow taxpayers, flooded City Hall to appeal our valuations. The process reduced me to tears. I felt humiliated to have to argue why my old plaster walls were not a reason to value my house higher than the building two doors down that has drywall (only one example of many). Why should I pay more for having preserved what was here, rather than ripping it out and replacing it, at considerable expense? If I were to put this house on the market, I doubt that plaster walls would count as a selling point. What's the bottom line? The longer I live here, the higher the likelihood that I'll be taxed out of my home.

I just had my done too, lost over $200K in value and just like so many others, it blew away my chances to refi at a lower rate, or even sell for a profit. It just has to be a plan thought up by this present administration.

Another big problem with the appraisers is that they do not have to identify what TYPE of siding is on a home, only that there is siding. This particular issue cost me $21K last year.

As a loyal Angie's List member and a Certified Residential Appraiser with 10+ years of experience, I am torn on the subject of using an Angie's List rating system for appraisers. Appraising properties, especially with the constraints imposed by the lenders and the challenges of working for less money with short turn times, is a very tricky process. Most Real Estate Agents don't understand the appraisal process and virtually no homeowners understand what makes a good appraisal. The typical homeowner and Real Estate Agent considers an appraisal that arrives at the right number (the one they think is right) is always a good appraisal. I am in the process of buying a new home and the lender sent out an experienced appraiser who appraised the property I'm buying for more than the contract price. Good appraisal, right? Wrong. The appraiser failed to do many things required by Fannie Mae and the typical lender underwriting process. This will probably sail through the system without a problem despite the errors and omissions. A home I had looked at while home shopping was over priced by @ 10-12% and is currently under contract at an over priced amount. The appraiser will likely hit the contract price by ignoring the different school influences in this area by using properties in the same area that track into a superior school to justify the value being paid for the property that is located in a small area that tracks into a lower rated school. Value manipulation still exists despite the new regulations because of the "approved appraiser" lists maintained by various lenders that undermine the objectivity that was the goal of the regulations.

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