Investor · Saint Louis, MO · Member since 2013 · 198 posts · 25 votes
In August I attempted to refinance my mortgage on my fourplex and as a result had to get an appraisal performed. The appraiser came took measurements of the building, verified sq. footage, took pictures, and inspected each unit and the property carefully. In total spending around 45min- 1 hour around the property. The appraisal cam in at 548k.
I just had another appraisal performed, this time in an attempt to attain a HELOC loan. The appraiser briefly inspected each unit. Took a few pictures and was finished with the appraisal in about 10min. I thanked him for coming out and handed him the appraisal that was performed in August for 548k. His comes in today at 450k.
Sorry for the novel, but I wanted to reach out to the forum and see what my options were. I would obviously like to dispute the appraisal and the comps he used. I obviously prefer if he used the comps on the refinance appraisal that led to the 548k price. I'm totally flustered with this guy! What are my options???
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Thanks for your response @Steve L. The 548k appraisal was performed 9/15/13. The 450k appraisal was performed 10/14/13.
The appraiser used one of the same comps.
The refi and HELOC are different animals with different risk positions for lenders. I don't think it's reasonable to expect the appraisals to be static and irrelevant of loan type. To play devil's advocate, from the lender's perspective, let's look at what the 2nd appraiser had to work with.
How many and how current were his comps? And how far back did he go?
How many and how current were the comps from the 9/15 appraisal? And how much we you refi-ing?
Even 2 or 3 sales of truly comparable properties under $500K makes the $450K make sense.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
12y
Step 1 is to contact your rep and say you would like to do a rebuttal to the appraisal. You need to review the comps he used and make a case for why those comps he used should be eliminated (aka: provide more suitable ones) or that he did incorrect adjustments.
How long ago was the 548k appraisal? Where many of the same comps used?
In my honest opinion you have an uphill battle. If you gave him the previous appraisal at 548k and he came in at 450k he did it because he felt he had good evidence.
I have done a couple rebuttals and lost pretty much every time. Good luck.
Investor · Gurley, AL · Member since 2013 · 47 posts · 9 votes
12y
Hi @Rick L. ; I have to agree with @Steve L. . I have also tried rebuttal without success. The appraisal company and the bank stuck with the appraiser. I had to find another bank and do it all over again. Sigh. I have read about how appraisals are performed, how they take deductions, how to fight a bad appraisal, etc, and you can find that out on the net. Any reduction values they take on your property to me seem to be based on the particular appraiser; how they feel that day; the weather...I'm sure it is experience-based on seeing many many similar properties, but it seems rather subjective at times. Hope it works out for you. Cheers
Step 1 is to contact your rep and say you would like to do a rebuttal to the appraisal. You need to review the comps he used and make a case for why those comps he used should be eliminated (aka: provide more suitable ones) or that he did incorrect adjustments.
How long ago was the 548k appraisal? Where many of the same comps used?
In my honest opinion you have an uphill battle. If you gave him the previous appraisal at 548k and he came in at 450k he did it because he felt he had good evidence.
I have done a couple rebuttals and lost pretty much every time. Good luck.
Thanks for your response @Steve L. The 548k appraisal was performed 9/15/13. The 450k appraisal was performed 10/14/13.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
Thanks for your response @Steve L. The 548k appraisal was performed 9/15/13. The 450k appraisal was performed 10/14/13.
The appraiser used one of the same comps.
The refi and HELOC are different animals with different risk positions for lenders. I don't think it's reasonable to expect the appraisals to be static and irrelevant of loan type. To play devil's advocate, from the lender's perspective, let's look at what the 2nd appraiser had to work with.
How many and how current were his comps? And how far back did he go?
How many and how current were the comps from the 9/15 appraisal? And how much we you refi-ing?
Even 2 or 3 sales of truly comparable properties under $500K makes the $450K make sense.
Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
12y
I would venture to bet that a HELOC or refinance appraisal order come from the same place and the appraiser wouldn't know the difference. The guidelines of the loan maybe different.
My opinion would be 450k can be justified and 540k can be justified. Both appraisers had a different opinion of value. 1% of appraisers get upset when you hand them a previous appraisal and make a point to blow that up.
Your best case scenario is if there are blatantly obvious mistakes. Bedroom count is off, rental income is incorrect, sq footage is incorrect, they did not factor in garages.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
What was the purpose of the first appraisal? If it was for a loan, it's only two months old, ask that lender to assign it to the heloc lender for review. Yes, you can contest it, the new lender can decide. They can have the last guy review it and adjust it if he will, but I'll bet dollars he won't go near the higher one, saving face if nothing else. :)
Investor · Chicago, IL · Member since 2009 · 566 posts · 274 votes
12y
@Rick L.
Everything that is being said is completely true. I will say I've had success ONE time with rebutting an appraisal from the 1-4 conventional financing side. They only came up about half the way I wanted however it still worked for me. It sounds like you might have some solid evidence to support your case. I would put together a one page summary outlining your rebuttal request. Include everything that has been mentioned above including what comps you believe should have been used and why. You can also submit the other appraisal with the rebuttal request as backup evidence to support your case. As stated above finding any blatant errors or adjustment errors will definitely help.
At the end of the day the bank won't want to come up but they might. Hopefully your mortgage professional can help convey your message. Good luck!
Investor · Saint Louis, MO · Member since 2013 · 198 posts · 25 votes
12y
Thanks for all the suggestions. I'm working on builiding my case for the better comps. I realize I'm fighting an uphill battle, but I might as well try.
Investor · Saint Louis, MO · Member since 2013 · 198 posts · 25 votes
12y
Just wanted to update everyone. So, much like those who have had similar experiences have said. I was unable to overturn the low appraiser's appraisal. However, I did reach out to several bankers via a local REI club. Several of the bankers were more than willing to accpet the good appraisal and proceed with the HELOC. I'm happy to report that I will closing on the HELOC loan by the end of the month.