Bankers make money from appraisals?

[Hector I Rodriguez Montanez]

Hey Bigger Pockets Community!

I'm in the process of buying my first home/investment property with VA Loan.

I already tried to buy a house but the appraisal came up lower than the price of sale and the owner wasn’t willing to lower the price.

That being said I'm submitting the paper work for an appraisal on another property. And the bank is charging me $670.00 AGAIN.

In the previous negotiation the appraisal says it was for $395.00.

Is that OK? Why the banker is charging me more?

PLEAS ADVISE

Thank You.

Héctor Iván Rodríguez

[Lawrence Johnson]

Saludos @ Hector  I Rodriguez Montanez.. Sorry to hear about the issues you are having.. I'm an RE  investor as well....but by day I'm a mortgage banker here in beautiful Puerto Rico. I'm more of a correspondent lender so I work with ( but not for) the big banks here on the island but offer a bit more personal service ( as its very easy for clients of the big banks to be treated more like numbers than actual clients).  My company also has a direct relationship with Fannie Mae so we try and stay away from the big banks if at all possible.  That being said, to me it sounds like the initial $670 fee you were charged was the " Initial Deposit" Here in PR ( and many places in the states as well) lenders charge a fee once you are under contract on a property to cover the initial expenses such as the Appraisal, Plot Plan ( in PR these are mini-surveys on single and multi-family homes), and the Estudio de Titulo ( title search).  You should have been provided with a Loan Estimate that has these items broken down and itemized and the bank rep should be able to tell you exactly what the $670 is going towards....but it should not be for just the appraisal (unless you are buying on one of neighboring islands...but that doesn't sound like the case here).  

Since the first transaction didn't go through you will unfortunately have to pay for the same services ( appraisal, plot plan, title) all over again.  I will say that depending on the vendors being used, each back will have a different set of fees for the same services ($670 does seem a bit high though if you are buying in the metro area here....unless you are buying a huge 2 -4 unit home).  

VA can be a bit tricky here in PR. I get calls often from people that had issues at other institutions here often. I can 't always promise the outcome you want but I assure you that you won't be in the dark about what is happening with your transaction.. Feel free to private message me if you need additional help or have questions as I know it can be difficult to get answers from bank reps.

....oh and ESP means Especially:)

Take care!!!