Appraisal / Refinance Troubles - Need Advice!

[Nathan Faucett]

Hi -

My wife and I bought a 2700 square foot house (living space) in June of 2019 for $235k in Greensboro, NC (Zip Code:27410). About 1000 SF of that was a below grade, walk-out basement that was in really rough shape. It had 1 bedroom, 1 bathroom, 1 small office, and was completely outdated and gross (Acoustic tile painted black, painted wood-panelled walls, nasty dog-smelling carpet, etc)

We put about $30k into renovating it - It now has 2 bedrooms with new walls, drywall ceilings, a full kitchen, completely new bathroom, new light fixtures, etc - it is essentially a luxury condo that we are now househacking with.

We sought a refinance in July 2019 and an our appraisal came back really low - only $250k. One of the main reasons for this was that time was no "Date of Sale/Time" adjustments made even though the comps went under contract in May 2020, December 2019, and February 2020. Based on form 1004MC2 - Market Conditions Addendum to the Appraisal Report - Median Comparable Sale Price increased from $207,500 to $231,500 over the past year - an 11.6% increase! If you go on Zillow and blindly look at my zip code, the change from September 2019-August 2020, it goes from $248,000 to $262,000 - an 5.6% increase!

We have challenged this appraisal and our bank has told us that we can pay $300 (a $250 discount) for the same appraiser to add new comps (and there are much better comps now), but he seems unwilling to make any changes based on "Date of Sale/Time" OR we can pay $550 for a brand new appraisal to be done.

Is this typical? What would you recommend doing? Why? Any other advice that you might want to provide?

Thanks in advance,

Nathan