Property appraisals

[dave1949]

hchxoom: Your comment regarding more regs for appraisers makes sense, they were part of the problem too. One asked my brother on a re-fi how much he needed the house to appraise for, as an example.

 

[s219]

It's all about the paranoia in the housing market now, and the fact that property values have dropped quite a bit in recent years. The banks are required to get appriasals, and unlike older days, they have almost no say/influence in the choice of appraisor or the results.

 

[hchxoom]

hchxoom: Your comment regarding more regs for appraisers makes sense, they were part of the problem too. One asked my brother on a re-fi how much he needed the house to appraise for, as an example.

Yep, there were many examples of bad appraisers just as with bad bankers (and more than a few where bad bankers and bad appraisers were in cohoots with bad borrowers), thus the regulations. However, as with anything the majority (of appraisers, bankers, and borrowers) are good folks with good intentions... but they/we now have to live with the same costly regs put in place to hamstrimg the dummies and cheats (sins of the few cost us all). So goes the world as we move from individual handshakes, honor, and responsibility to asking the gov't to solve all ills through regulation (my opinion).

 

[ljohnson778]

Yup, seems crazy, until you do the math. When I sold my last house, the bank for the buyer had an appraisal done. Then they had a 'LARA' done. Think they called it a landsafe appraisal risk assessment. This was because appraisers were asking people what they needed the appraisal to come in at, and that's what they reported. Also, houses change, neighborhoods change, etc. So, a current appraisal is almost always required.

 

[JDgreen227]

Thanks to all who provided input....my loan rate is 3.75 fixed for a 15 year period which is basically a steal as the rate back in 2002 was 6.75%. I was simply wondering if the appraisal was actually even necessary, given the current township assessment...appears it's a CYA situation for the lender. Actually, their rate is competive with any other lenders I checked with and even though I could withdraw the $70,000 from a 457 plan, the tax hit on the withdrawal makes that a bad idea. Appears my lender has been using the same appraiser for a 12 year period...makes me wonder who is getting a kickback because I would truthfully prefer to have some other appraiser do the task so that one would not be parroting what he already knows. The two appraisals I had done in 2000 and 2002 are almost identical except for the property valuations and comps...

Thanks guys, for your input on the issue...:thumbsup:

 

[dave1949]

Yep, there were many examples of bad appraisers just as with bad bankers (and more than a few where bad bankers and bad appraisers were in cohoots with bad borrowers), thus the regulations. However, as with anything the majority (of appraisers, bankers, and borrowers) are good folks with good intentions... but they/we now have to live with the same costly regs put in place to hamstrimg the dummies and cheats (sins of the few cost us all). So goes the world as we move from individual handshakes, honor, and responsibility to asking the gov't to solve all ills through regulation (my opinion).

I agree that regulations are the result of bad actors. Life has become more complex. I relate to this more on environmental issues than financial, but it is the same root problem--stupidity and greed. For example, coal-fired power plants half way across the country can kill the forests here and load the water up with mercury so bad you aren't supposed to eat too many fish, and none if pregnant. What good is a hand shake going to do you in such cases? You don't even realize you are being "cheated" until years later.

On the other hand, the regulatory agencies aren't very cost-effective, often become protectors of the people they are supposed to be regulating, get behind the curve on the science, etc.. It's a problem waiting for a better solution, or better people, I guess.

 

[JDgreen227]

Just an update is anybody gives a (bleep) I got a copy of the newest appraisal today. The property was given an appraisal in early 2002 for $140,000, it was then a 2 bedroom 1 bath house on an 11 acre lot...we borrowed $112,000 to build on and that was ALL FOR MATERIALS AND NEW APPLIANCES no labor involved but for paying for new underground 200 amp service, excavation work, and a new well (about $9000 total) as it was mostly sweat equity. House is now 2400 square feet, 3-4 bedroom, 2 1/2 bath, formal dining, $20,000 invested in the kitchen alone, $6,000 corner whirlpool tub, 2 decks, orignal house was pretty much gutted and redone in the process, know what the appraised value is now? $190,000....meaning we spent $112 grand, plus interest on the loan, plus all that sweat equity, and it only added $50,000 to the market value.

I don't know whether to laugh or cry....but then again, we didn't really build on for the increased value of the property. At least I now have ammunition to deal with the next property tax assessment increase that I get. I think the appraisal is REALLY LOW....the house 3 doors down is lower quality, 1000 square feet less and on a minimum size lot, and the last buyer (3 years ago) paid $183,000...oh well.

 

[dmccarty]

Houses are not selling so getting an accurate appraisal is more difficult. When we were building, the first appraiser was a moron. No other way to describe the guy. Land in the same development was selling for much more than he appraised our property. Moron. We showed the bank how this the guy had messed up and they got a new appraiser who was at least competent. When the house was being built they had a dip scat show up to look at the construction. He pulled up in his convertible wearing really nice dress shoes. He was supposed to check out how much work had been done with the foundation, slab, and plumbing. He got out of the car, walked a few feet to the edge of the gravel, took a look at the foundation 20 feet away, wrote something on the clip board and left. Moron. He had no clue as to the work going on INSIDE the foundation.

We tried to get a ReFi but the appraisal was so low it did not make sense to continue. The comparable houses they showed were not even close to us in location much less other details. There are simply no houses selling to make decent comparables in our area.

Later,
Dan

 

[Bikewanderer]

Appraisers don't have a lot of comps to deal with. My house was appraised three months at at 153k, house two doors down with identical floor plan and lesser interior finish sold for 176k two weeks later. Their appraisal came back in the 180's.

This is the cost of borrowing money. You'd better get used to if if you want to keep taking out loans.

 

[riptides]

I had to go through three (3) appraisers for a mortgage. The banks are just playing hardball. The spred on the appraisals was over 150k and in the end all three missed an 8 acre parcel I own, adjoining my "house" lot.

These were FHA loans, so if you know about them, your asking yourself, how could he get three appraisals done?

Well, refer to the hardball statement.