House appraisals

mbalbritton

mbalbritton

#@$%!
Joined
Mar 22, 2005
Location
Lakeland, FL
So our housing market is insane right now, and the other day I had an appraisal done on my house. The appraiser didn’t come investigate the house, some lady came round and took pictures and took that back to the appraiser.

A few days later we get the appraisal and while the value they assessed is about 15% higher than my purchase 3 years ago, it’s no where in line with the comparable houses in the area.

I asked to see the appraisal and some of the reportings I found were quite questionable. Notes such as:

1. No updates in 15 years
2. Average windows
3. Neighborhood has several condo projects.
4. The three comparables were old sales. Not recent sales.

When in fact:
1. I put $20k in new triple pane windows in this house, the pool recently had a pebble tech surface installed, the master bath and kitchen are remodeled in the past 5 years with hard surface tops and new cabinetry, there a recent roof on it. Among other things
2. While not top of the line absolutely the best windows, they are much greater than average and far more efficient and safe than the single pane that was in.
3. Not a single condo project anywhere around around.
4. I have three recently sold comps that range 10-30% higher than even my appraisal.

WTF? I don’t think my house is valuable than all the others, but it’s certainly has more to offer than the lowest or even mid range of the comps. What a freakin scam.
 
Have a buddy that just sold his house. He had an appraisal done before he signed up with a realtor, the appraisal wasn't as good as he thought it would be. After he signed with the realtor, he showed the realtor the appraisal and the realtor said he could easily get $20k or so more than the appraisal. Realtor listed it about $20k more than appraisal and it sold within 36 hours of being listed for full list price.
 
Couple factors here.
1) You are leanring the hard truth that most improvements dont add value to most buyers. As long as the windows open and arent cloudy - you will not return $1 on new windows because a buyer doesn't see the benefit.
2) The housing bubble crash and subsequent regulations did a number on appraisal restrictions. Its now a very dumbed down process. Its literally within an X mile circle, same # of bed and baths, $/sqft x sqft.
3) The condo project thing doesnt factor in, because well legally it cant. That's housing discrimination.


#2 has created a fascinating shell game in institutional markets. Ive watched instituional buyers (hedge funds) buy up 80% of entire neighborhoods and then sell homes to other institutional buyers (with I suspect common owner interests) for more than worth. (Since the institution is paying cash they dont rely on appraisals) but after enough sales they just created their own comps to drive the remaining inventory value up. Where they dump and profit.
 
Yes I experienced the same thing early this year during my refi. I was livid. They appraisal report was overall ridiculous, they used homes 5 miles from here in the $180k range when a house 5 driveways down on my same street sold for $268k a week before my appraisal. Just months before houses in my hood were selling in 2 days or less for $20k above asking (in the $230k-$245k asking price range)

I called my friend/realtor and she printed off all the home sold IN MY NEIGHBORHOOD inside of 4 months and I argued it. They came back and raised their appraisal $15k which still wasn’t close to what I know I could sell this house for. But I was sick of fighting it. My mortgage guy said in all his years he’d never seen an appraiser raise their amount like that.

Seems when a house is selling and the bank wants the new loan it works different.
 
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Appraisals are a joke. I have a guy that works for me that owned an appraisal company with his wife pre-08-crash and to hear him describe how it was vs how it is gives me 0 faith in the process, then or now. They were so liberal with valuations before and the pendulum swung so far to the other side that neither of them really line up with reality. When I refi'd my house last year, I got a pretty crappy spot like @77GreenMachine did. I find it impossible to believe that my house, 1yr old at the time, 3200sqft, granite countertops, custom cabinets, site finished hardwoods, top tier carpet, etc, on 26acres was only worth 420ish. In all fairness, my appraisal was done before prices shot through the roof a few months later. It appraised for enough for the refi so I didn't fight it. It was rather insulting though.
 
awheelterd said:
I find it impossible to believe that my house, 1yr old at the time, 3200sqft, granite countertops, custom cabinets, site finished hardwoods, top tier carpet, etc, on 26acres was only worth 420ish. In all fairness, my appraisal was done before prices shot through the roof a few months later. It appraised for enough for the refi so I didn't fight it.
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#humblebrag :p
 
I refi'd in December...they didn't even come out and look...just took comps. Basically told me, you owe less than 80%, here's what's for sale/sold for in your area, here's you're new rate. I literally just finished a refi/cash out and was funded this week...completely different. They came in hardcore, the appraisal was actually less than the one in December...still well above what I paid, but about $30k lighter than I was expecting. Primary reason, 'Exposure Time'. Summary, my end of the market is cooling, what used to be a 30-45 day sale, is now anticipated to be a 160 day sale, and there were assumptions of price reductions in the appraisal. All the while, I have an unfinished house 2 doors down with 800sq/ft less than I do, listed for $7k more than my appraisal was for. So I have no doubt, I could probably clear another $50-75k if I sold today.
 
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Last appraisal we had the Dumbass said we had to much garage space and no one would want to buy our house. I said good cause I built what I wanted, not what you think will sell. Still came in about double what we had in building the house and that was about 7-8 years ago.
 
77GreenMachine said:
Said literally no one ever.







Like no one.
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Well, that depends on what it is. If its a standard type garage, I agree. Having a 50x100 steel building in the backyard is a different story. There are definately people out there to buy, but the "normal" buyer (ie women) will think its an eyesore.
 
paradisePWoffrd said:
Well, that depends on what it is. If its a standard type garage, I agree. Having a 50x100 steel building in the backyard is a different story. There are definately people out there to buy, but the "normal" buyer (ie women) will think its an eyesore.
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yep. A lot of people (not me) would rather have the yard space it occupies or not have to worry about heating it etc.
This is why giant garages rarely add resale value to homes
 
paradisePWoffrd said:
Well, that depends on what it is. If its a standard type garage, I agree. Having a 50x100 steel building in the backyard is a different story. There are definately people out there to buy, but the "normal" buyer (ie women) will think its an eyesore.
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4 car basement garage and a detached 28x36 garage/shop that matches the house. Also got plenty of yard so it’s not taking yard space.
 
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