Appraisals coming low when refinancing?

[Daniel Chang]

Hi guys,

So I have a quick question. Something that is happening to a friend of mine lol.

He bought a house last year as primary home and right now he is refinancing as an investment property. His house just got appraised at 242k. Talking with a new neighbor, who just got a similar home 1 block away a few weeks ago, his appraisal came at 260k.

They went and talk with the bank with both appraisals and the bank told them that the appraisers usually give a low ball when a refinance happens to protect the bank's interest, but when is a new purchase they look at the value market.  

Is that usually true? legal? I thought an appraiser should always be unbiased and give a fair representation of what the market value of a home is.

Thanks a lot! 

Update: Portland, OR :)