I recently purchased a home through a hud auction. The house was in need of some repairs and TLC and was listed well below market value for the area. It needed lots of cleaning, plumbing fixtures missing, new hot water heater, paint, moulding missing and repair, etc. I purchased the home cash with the intent to get conventional financing after repairs were finished, using the equity in the home for down payment, saving my cash for later investment properties.

The home was built in 1956, but has been extensively remodeled over the years (last remodel was in 2012). The home is ~2500 sq. ft, 4 bedrooms, 3 full baths, 11 total rooms including living room with wood burning fireplace, dining room, large den with gas fireplace, large master bedroom with walk in closet, master bath features quality fixtures, large double vanity cabinet with granite countertops, jacuzzi tub with tile shower stall. 2nd bath also features quality vanity with built in tub and tile shower. 3rd bath has standard shower stall and standard wall mounted sink. The kitchen features lots of cabinets, granite countertops, built in double convection ovens, built in gas 5 burner cooktop, breakfast bar, built in double sided wine cooler, and built in fridge cabinet. Flooring is quality ceramic tile throughout most of the home and quality laminate flooring in living room and bedrooms. Home also features many large double pane windows with nice wood blinds and heavy window trim throughout living areas, crown moulding throughout the home, quality front door with sidelights, 2 car steel garage builiding, large driveway with 2-3 car carport, 2 ac and heater units, 2 hot water heaters, front built in porch, large rear screened in porch, with small porch leading to backyard. The front exterior of the house features stucco with vinyl siding on sides and rear of home. House sits on a 20,000 square foot piece of property.

My market is a small town of approximately 3,000 residents. The town sits along the intercoastal waterway that leads into a small bayou through the town. Approximately 50% of the homes in the area are built at or near the waterway. The market consists of various style homes, some mobile homes and custom large homes with not much conformity. Single Family Home Values range from 50 to 400k with ages of 80 years to new. Being such a small market with little sales makes it difficult to find comparables.

Now to my issue:

Homes with my size and amenities in this market usually start around $180k. My appraisal came in at $160,000.

The appraiser sited 3 comps - A 2000 sq ft. 3 bed 2.5 bath w/sale price of 180k, 20 yr old home, good shape, fairly updated kitchen and baths; A 2100 sq ft. 3 bedroom 2 bath 40 yr old house, terribly outdated (wood paneling on walls, cheap flooring, small bedrooms, etc.) w/sale price of 135k; A 2200 sq ft. 6 bedroom 2 bath 11 year old Foreclosure sale. This home was large, but a basic builder grade home, no special amenities besides fireplace, small bedrooms, small kitchen, basic appliances, cabinets and countertops, basic bathrooms, cheap carpet and vinyl flooring, etc. w/ sale price of 129k.

He then made net adjustments of -2%, +23.5%, and + 21.1% to match amenities.

After receiving the appraisal, I emailed him addressing my concerns that two of the comps were too far off compared to my home. I sent him addresses of some homes that looked like they were better fitting as comps.

One home which was almost the exact size, room count, upgrades, porch size, garage, etc. as my home. The only difference was that the home was on the water, and featured an all brick exterior. He claimed that the quality of construction, condition of the property, and location on the water were superior to my home. Which disqualifies it as a comp.

Not once in his report does he note any negatives to the condition of my property. He notes that typical physical depreciation is within acceptable parameters and no functional obsolescence was noted.

He also adjusted the first comp -20,000 for location on the water. How can he say that this disqualifies it as a comp. If the water location disqualifies properties, then half of my market is not accessible as comps.

Another home he cited the age of my property as a disqualifier. He stated that this home was only 11 years old. Yet he used an 11 year old home as a comp.

Another home he cited quality of construction and lot size as a disqualifer. Yet he only adjusted the other homes for my lot size at .25 a square foot. To be honest this home looked more like a custom high end home but had similar features, but his lot size comment made no sense.

Another home was a much smaller 1500 sq. ft. home that sold for 180k. He stated that location on water and smaller square footage disqualifies this home as a comp. Yet he used a home that was located on the water as a comp and he used all three homes that were smaller in sq. footage.

He then stated that he had also looked at active listings in the area. He gave me an address to look at a home that had recently been reduced from $175k to $170k (similar square footage, 4 bed 2 bath). Upon inspection of this address, it was a mobile home. He obviously did not even look at the listing and just pulled the info from the MLS to justify himself.

He also mentions in every email the amount of my purchase price of the home.

I then asked him questions about the inconsistencies above as well as provided him with another listing of a similar constructed home, much smaller (1700 sq ft), fewer rooms, with similar upgrades listed at $175,000.

He provided no answer to these questions, no mention of the mobile home, and no mention of the new listing.

His response now was that the market does not have enough comps close enough to my home, so he was forced to use the homes that he did. He offered to adjust the value on two of the comps another $3 a square foot based on condition. This would bring my appraisal to $167,000.

I then contacted my loan officer to find out if she could do anything. She reviewed the appraisal, siting that the adjustments to the two comps were high which could indicate that they are not good comps. She contacted him to ask him to review again and possibly look outside of the market for more valid comps. He stated that he had already reviewed it and would absolutely not look out of market for new comps.

Do I have any recourse here besides paying for a second appraisal? I feel that he came into this appraisal with a preconceived value, and is only willing to use comps that support this value. I also feel that he's going to cost me money for a second appraisal because he is unwilling to do his job and look for the best available indicators of value.

Do I have any grounds for reporting him to my state appraisers board? Or is this a waste of time because its all based on his opinion?

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