House Appraisal for a Loan Question

Warrior

Warrior

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Warrior
Hi all,

I am comfortable on this forum and don't have a real estate forum where I can ask this question.

I am involved with buying a house. The appraisal firm chosen by the lender came up with a low enough appraisal that to complete the loan there will be an additional 3k fee. Is that standard practice today, for a mortgage lender to go for a low appraisal since the problems of 2007 and the mortgage crisis.
 
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Personal opinion: that sounds to be collusion. I'd shop other lenders before committing.

HR
 
We closed on our home Tuesday, it appraised for about 50k less than 3 years ago. The broker and the lender each had an appraisal done, they were within 1k of each other, one of the guys was the same one who did the appraisal 3 years ago. Seems to me the appraisal guys are appraising at realistic numbers these days.

Funny thing their cost to build estimates were 100k more than the market value and the home is new. I don't want to know how much the seller ate.
 
I'm not sure I understand the statement and/or question but tangentially...

When buying, I never let the loan company pick the appraiser. I pick the appraiser.

I never let the appraiser see the sales contract or purchase price. I want a real appraisal, not someone who's "making the numbers work".
 
I'm a state certified appraiser, have been for 20 years.

A lot has changed in the past few years.

To directly answer your question, no the lender did not go for a lower appraised value due to past mortgage issues.
 
timwinters said:
I'm not sure I understand the statement and/or question but tangentially...

When buying, I never let the loan company pick the appraiser. I pick the appraiser.

I never let the appraiser see the sales contract or purchase price. I want a real appraisal, not someone who's "making the numbers work".
Click to expand...
:yeahthat:
 
It's probably good that the general public doesn't know how R/E appraisals really work. I'm a certified aircraft appraiser, and the required training for the USPAP endorsement is the same for both asset classes. When you look at the cost of the real-estate appraisal, ask yourself how much time the appraiser may (or may not) have spent at the site.

Hint: There's a chance the appraiser was never anywhere near the property, nor was he required to be in order to write the appraisal report.
 
Warrior said:
Hi all,

I am comfortable on this forum and don't have a real estate forum where I can ask this question.

I am involved with buying a house. The appraisal firm chosen by the lender came up with a low enough fee that to complete the loan there will be an additional 3k fee. Is that standard practice today, for a mortgage lender to go for a low appraisal since the problems of 2007 and the mortgage crisis.
Click to expand...

I'm not sure I'm clear on the question.
1. Is the appraisal $3K short of the purchase price? If it is you can get another appraisal or have the seller lower the price to the appraised amount, which is more typical.;)
2. Is the appraisal short of giving you an 80% loan and the $3k private mortgage insurance (ponzi scheme) :nono:
3. Is the $3K a fee or additional down payment?
4. Have you talked to other lenders? ;)
 
timwinters said:
I'm not sure I understand the statement and/or question but tangentially...

When buying, I never let the loan company pick the appraiser. I pick the appraiser.

I never let the appraiser see the sales contract or purchase price. I want a real appraisal, not someone who's "making the numbers work".
Click to expand...


Thanks for your opinion. Given that the signed contract requires things to be done in a certain time period that advice will work for the next time I get involved with a real estate transaction.
 
Warrior said:
yes. we are buying the home for about 111k. Appraisal is 95k.
Click to expand...

I'd make that the sellers problem. ;) When selling I am always the one sweating the appraisal, I sold one a couple years ago for $135K the appraisal came in at $124k, between me and the real estate agent we ate it and went on with life.
This was an FHA loan, and the appraisal is valid for 6 months, which is essence meant I couldn't sell it to an FHA buyer for more than $124K for the next 6 months.:mad2:
As a buyer you don't want to be paying more than the appraised value, and appraisals in the last 5-6 years are sobering to say the least. :hairraise:
 
timwinters said:
I'm not sure I understand the statement and/or question but tangentially...

When buying, I never let the loan company pick the appraiser. I pick the appraiser.

I never let the appraiser see the sales contract or purchase price. I want a real appraisal, not someone who's "making the numbers work".
Click to expand...

My experience in recent years is depending on the type of loan, but FHA loans in particular have appraisers assigned, no more picking appraisers.;) The old question, "What's it worth?" Is no longer answered, "What's it need to be worth.":dunno:
 
We are days away from closing ourselves. This is something that we expected the sellers to eat, or we would have walked .

Thankfully, we talked the sellers down enough (love hardball negotiations) that we came out way better than the appraisal .

If I were you, I would walk or renegotiate.
 
Warrior said:
Thanks for your opinion. Given that the signed contract requires things to be done in a certain time period that advice will work for the next time I get involved with a real estate transaction.
Click to expand...

Your contract is probably contingent on financing $XX amount for 30 years at a rate not to exceed XX%. Right now you are in a pretty good position to negotiate the house down to $95K. The seller is generally not wanting to hang on to the house.:D
 
The lender's position is that they are commissioning the appraisal and that it will be issued to them and not shared with anyone else without their permission.

The lender's agreement with the borrower is that the borrower will reimburse the lender for the cost of the appraisal, but that it is the property of the lender and will become a part of their file.

Further, if a homeowner ordered an appraisal on his property the day before the buyer submitted a purchase contract, the lender (in many cases) won't use it and will insist on ordering another one showing the lender's name as the client.

N747JB said:
My experience in recent years is depending on the type of loan, but FHA loans in particular have appraisers assigned, no more picking appraisers.;) The old question, "What's it worth?" Is no longer answered, "What's it need to be worth.":dunno:
Click to expand...
 
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N747JB said:
My experience in recent years is depending on the type of loan, but FHA loans in particular have appraisers assigned, no more picking appraisers.;) The old question, "What's it worth?" Is no longer answered, "What's it need to be worth.":dunno:
Click to expand...

That may be true for FHA loans but not for regular loans. I just refinanced my house, my mortgage broker picked his favorite appraiser and I told him what it needed to be...and lo and behold that's where he came in. In fairness though, a guy down the street sold his house (an almost identical model with somewhat worse view) sold his house a couple of weeks later for about $100k above the appraisal, so the number may have been pretty accuragte if not conservative to begin with.
 
N747JB said:
I'd make that the sellers problem. ;) When selling I am always the one sweating the appraisal, I sold one a couple years ago for $135K the appraisal came in at $124k, between me and the real estate agent we ate it and went on with life.
This was an FHA loan, and the appraisal is valid for 6 months, which is essence meant I couldn't sell it to an FHA buyer for more than $124K for the next 6 months.:mad2:
As a buyer you don't want to be paying more than the appraised value, and appraisals in the last 5-6 years are sobering to say the least. :hairraise:
Click to expand...



Correct...if you are using an fha loan you have a much better chance of them coming down to the appraised value. If you are paying over appraised value the seller shouldn't have a problem giving you a $3k credit.
 
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