All Forum Posts by: Patrick Britton

Well you can start by thanking the system for creating appraisers that don't know what they're doing. This is not surprising at all. Do you know that every single appraiser is trained completely differently from another? and it sounds like your property is unique which makes it even more difficult for 99% of all appraisers out there. Unfortunately, my suggestion would be to tell the lender that either they either get another appraiser out there or you're going to find a different financial institution. banks need to stop hiring garbage appraisers.

@Homer Rodriguez 

You need to get a reconsideration of value going as soon as possible. This is exactly what I do for people. Send me a direct message if you want some actual assistance.

Appraisers are supposed to measure the subject property, do you know if your appraiser did that? They're not supposed to simply assume that whatever information is on any site, public or private, is correct. They are SUPPOSED to verify everything and when they don't, they are violating USPAP and that could have then lose their license.

Anyway, send me a message if you want some ideas on how to write the reconsideration of value along with some ideas on what you should say and what you should not say.

@Jeffrey Radcliffe  www.https://appraisersforum.com/fo... this one is OKAY but not many people have been using it lately.  Facebook has a few groups but most, not all, require you to be an appraiser.  The best group is 100% Real Estate Appraisers.  https://www.facebook.com/group...

@Sebastian WernickeI've done that before. Not by choice but as a requirement from the hard money lender I used. Just keep in mind that because appraisers are all trained totally differently the after repair value you're going to get on day one is going to be very different than an appraisal done on any other day. One of my properties got a value of $85,000, which I thought was a little low, so I waited four weeks had another appraisal done and it came back $130,000. Nothing was done to the place. So by all means speak with an appraiser but be aware that the financial institution providing you the funding will want to have their own appraisal ordered and won't care at all with the first appraiser says.

@David Sicherman  No one uses appraisers except for banks? I'm sorry but that's a pretty stupid thing to say. Really stupid. Attorneys, people getting a divorce, real estate investors, real estate agents before listings, FSBOs, all get appraisals ordered privately for themselves.

If you're using a lender, for a refinance for instance, your real estate agent's opinion, your opinion, a home inspector’s opinion or anyone else’s opinion of value is completely irrelevant. All that matters is what the appraiser thinks your property is worth. so frankly, if you want to get the highest appraised value, hire an appraiser and ask them 1000 questions about your property.  Ask the appraiser what you should do to get the highest appraised value. And make sure you specifically state that you were looking to get the highest APPRAISED value, not the highest MARKET value. Those are not the same and you want the appraised value!  Appraisers have some pretty strict requirements to follow in order to arrive at an opinion of value. The free market doesn't really have any requirements and will therefore provide a different answer/opinion of value.

Boy, I'm having one heck of a time finding a CPA that doesn't have his or her head in the clouds. I've got a couple of properties in Chicago IL requiring some tax services but you think I was trying to find the formula for grand unified field theory! Any ideas on how to find a CPA that isn't a total waste of time would be appreciated.

Thanks a lot!

A water stain does not necessarily mean there's water damage or an active leak. And are you sure it's a water stain? It's not coffee or some other liquid that got spilled on the wall somehow?

If you walk away from every single house that has a infinitesimally small and no longer problematic issue, you're never going to end up buying a house ever, and in this market there's no way a reasonable or rational seller would allow you to tear up drywall just to look at a leak that no longer exists.

If the home inspector said you're OK, you're OK.

I would argue that now is the absolute worst time to try to sell a property without the experience and expertise of a professional. But if you insist on wasting your own time, you might as well just go on Zillow and list it there.

@David Banker Seems to me like you have quite a problem in that you're trying to argue with logic when the problem itself is emotional. If your wife doesn't want to do it, no amount of logic, data, evidence, or anything you say will change that. so frankly, I would try to work on that aspect of things firstly. As you say, if all she knows about real estate are the terrible experiences people she knows has had I think you need to remove those experiences from consideration. Meaning, just because something did or did not work for somebody else doesn't necessarily mean that you are doomed to the same fate. 

Besides, the overwhelming number of negative opinions on real estate investing are the result of a failure to utilize the services of a professional property management company. I think that if you can demonstrate your understanding of the risks and how you intend to mitigate each one you may have a fighting chance. But again, at the end of the day if you are trying to win an emotional fight with logic, you might as well not even bother.

@Satima Flaherty have a look at Toledo, OH.  

@Pablo Pozo  

For starters, the appraisal industry is totally screwed up. Every single appraiser is trained differently. This means you're going to have wildly different results for the same property. some appraisers try to bracket comps which means they look for properties that are sold above and below the contract price. Of course, there isn't a contract price when there's a refinance, so keep that in mind.

“when it comes to establishing the overall value of a property, the appraiser looks at the range of comparables and the new appraised value that is given to the subject property cannot be higher than what the highest comparable value is. Is this accurate?” Not exactly, but generally speaking, yes. It is all about being able to provide the lender or the end user, the client, with support for whatever opinion of value the appraiser reaches. Appraisers are lazy creatures, for the most part, and will simply trying to value for which there is the most support not necessarily a value that is in line with the free market. Bracketing really helps an appraiser believe that they are doing a good job, and when bracketing is done correctly I would argue that it is for the benefit of the greater good.

Unfortunately of course, in rapidly appreciating markets like the one we've been in for the past six months, bracketing is essentially impossible. this is one of the many reasons why the overwhelming majority of appraisals these days are coming in below contract price. It's also a reason why we should really overhaul the entire business itself. But I digress.

In short, most appraisers will try to bracket comps and some will spend a lot of time trying to do this and others don't really care that much. It also depends on why the appraisal is being done in the 1st place. Is it a new purchase? Or is it a refinance? Or is the owner just curious? Suffice it to say that when the stakes are at their highest, appraisers like to find bracketed sales. But they don't necessarily have to do it if there is sufficient evidence to support their opinion of value through other means and metrics.

Lastly, appraisers are required to follow the uniform standards of professional appraisal practices. but of course, just because one is supposed to follow rules written by others, that is not to say that those rules are actually correct. In fact, in my humble opinion, appraisers are often out of touch with market forces and do not understand or appreciate rapidly changing prices as much as an experienced realtor, for example.

Appraisers are never supposed to simply average out the comps. You find evidence that they've averaged out the comps and you have yourself quite the legal case against that person.

However, there are no requirements that any of the comps need to be within a 0.3 mile radius. Unfortunately, appraisers are left to their own subjective judgment when it comes to nearly every aspect of the development of an opinion of value. This is in stark contrast to what the National Association of Realtors teaches but whatever.

So to answer your question, neither.

Everything is going to be hyper specific to your local market. sometimes appraisers will need to look for a comparable property that is miles away from the subject. sometimes they need to look at comps that are of a different architectural style.

but at the end of the day most appraisers are really simple creatures and will often take the path of least resistance that also has the lowest probability of them getting sued. And that's something to keep in mind for all properties; appraisers have two nearly equally important priorities: don't be the subject of a complaint or investigation and arrive at a value that isn't necessarily correct or incorrect but rather, one that is easy to justify to a judge.

Appraisers are very fearful of lenders coming back to them after the borrower has missed months of payments and the market has taken a nosedive. Yes, there's a very low probability that both of these things will happen within year of the appraisal but again, appraisers are very simple creatures. Appraisers are also very concerned with the growing number of reconsiderations of value. This is where a borrower receives an appraisal whose value is substantially less than expectations and believes they have reason or grounds to file a complaint and have value adjusted based on the evidence you provide to the lender. By the way, this is what I do for people. I help people write reconsideration of value reports so that they can get more out of the refinance or whatever else they need.

You have to remember that appraisers have no incentive whatsoever to arrive at an opinion of value that is equal to or greater than your estimated after repair value. They have no incentive to meet a contract price, list price or any price for that matter. I would argue that this level of unbiasedness is beneficial for the greater good but unfortunately appraisers are all taught differently still, which means that one appraiser can give you one opinion of value that is 10s of thousands of dollars, sometimes hundreds of thousands of dollars different than another appraiser who looked at the property on the exact same day.