Having Appraisal Issues!!

[Kirk Frickey]

So I’m having issues with an appraisal and I want to see if anyone here has any advice for me. So here is where I’m at...

I have a triplex under contract through a wholesaler here in New Orleans, LA. I ran comps for this property, along with my fiancé who is an Agent, and we seen comps to support the purchase price of $298k and also an ARV of about $550k. Well, once we got the appraisal back they have the as-is value around $160k and the ARV at $410k. I knew it was off the second I heard the numbers so I asked for a copy. When reviewing it, I seen they pulled two comps from 10 years ago and 3 more comps from an area not even in the same zip code.

Immediately, I went get on the computer and pulled comps again and sent them to my lender to send back to the appraisal to ask why these comps I see are not being used. These comps are all within about 3-4 blocks of the house and one was the same street and sold 5 days before for a little over $560k. Only difference I see are these houses are doubles with only one similar triplex, and my potential property is a triplex. Both are two story, both are around the same square footage, similar bed/bath, etc.

I tried calling the appraisers myself but they won’t give me any info on it since I went through a private lender. It’s been about a week now and I have heard nothing back on if they will adjust the appraisal or not. I’m just wanting to know if anyone has been here and has any pointers since I can’t directly talk to them.

Thanks in advance!

[Aaron Poling]

There should be a formal dispute process for the appraisal, the lender should be able to help you with this. Typically there is a particular form it has to be submitted on. These are difficult to win in most cases but if you can find errors in the appraisal, and comps that weren't used but should have, then you have a chance. I have never seen an appraiser use 10 year old comps, but whatever they use it has to meet the Underwriters criteria, so if the comps shouldn't have been used then the UW may be able to kick it back to the appraiser, or in a few cases they may be able to scrap it and move on. 

It may be worth trying to ask the seller to lower the price just in case they are willing also. 

What type of loan are you getting on this property? Is it an owner occupied mortgage, or a commercial loan? 

Good Luck! Aaron