Question on appraisal

[garysears]

I recently fell out of escrow on a multi-unit property. The appraiser absolutely DID see the contract. I was told it is required but I still can’t see why the contract should have any bearing on an independent opinion of the property value.

Much as there was lender pressure to “hit the number” during the bubble, I believe there is government pressure to “hit the number” in this down market. I was told that if appraisals vary by more than some certain percent (I can’t remember exactly how much) from the contract price, they are flagged by the government as potential bad appraisals or fraudulent. I believe this is creating pressure to hit the contract number.

In my case, all three appraisal values were almost exactly the same as my contract price. Somehow evaluating the property based on comps, rental value, and replacement value each yielded almost exactly my offer amount. Based on this experience I view the appraisal as completely worthless and I am really irritated I had to pay for such garbage.

There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.

[CA renter]

[quote=garysears]

There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.[/quote]

Totally agree with this.

BTW, I’m sorry to hear your deal fell out of escrow. Did you cover it (falling out of escrow) in another thread? It seemed like you were pretty excited about the property.

[CA renter]

[quote=garysears]

There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.[/quote]

Totally agree with this.

BTW, I’m sorry to hear your deal fell out of escrow. Did you cover it (falling out of escrow) in another thread? It seemed like you were pretty excited about the property.

[CA renter]

[quote=garysears]

There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.[/quote]

Totally agree with this.

BTW, I’m sorry to hear your deal fell out of escrow. Did you cover it (falling out of escrow) in another thread? It seemed like you were pretty excited about the property.

[CA renter]

[quote=garysears]

There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.[/quote]

Totally agree with this.

BTW, I’m sorry to hear your deal fell out of escrow. Did you cover it (falling out of escrow) in another thread? It seemed like you were pretty excited about the property.

[CA renter]

[quote=garysears]

There is NO justification in my mind for appraisers to see the contract. That destroys any hint of impartiality, especially if I am correct about government pressure to “hit the contract number”.[/quote]

Totally agree with this.

BTW, I’m sorry to hear your deal fell out of escrow. Did you cover it (falling out of escrow) in another thread? It seemed like you were pretty excited about the property.

[CA renter]

[quote=SD Realtor]CAR the appraisers need to see the contract more for conditions/concessions then the price. Appraisals are done differently these days. Now independent appraisal management companies have been created. For most (but not all) loans the appraisal is ordered by the lender, the order is received by the management company, they contact an appraiser who goes out and does the appraisal. The appraisal is then submitted back to the management company who usually does their own review of the appraisal and then they send it to the lender. Copies could be made available for the party paying for the appraisal. I say most but not all because I think certain lenders like credit unions do not use the management companies but don’t quote me on that.

As far as where the price can come in at, it depends mostly on comps but concessions can play into it as well. SO for this situation, 8k below list price is, well, 8k below list. Ask the seller to reduce the price or the buyer needs to come up with the money. As far as the appraiser thinking that the price was different… well… that sounds like the appraiser kind of boofed it.[/quote]

Shouldn’t the house be appraised based on comps, local rents, etc.? Whatever deals the buyers and sellers have regarding concessions, etc. should have no bearing on the appraised value, and the condition of the property should be noted during the appraisal, no?

[CA renter]

[quote=SD Realtor]CAR the appraisers need to see the contract more for conditions/concessions then the price. Appraisals are done differently these days. Now independent appraisal management companies have been created. For most (but not all) loans the appraisal is ordered by the lender, the order is received by the management company, they contact an appraiser who goes out and does the appraisal. The appraisal is then submitted back to the management company who usually does their own review of the appraisal and then they send it to the lender. Copies could be made available for the party paying for the appraisal. I say most but not all because I think certain lenders like credit unions do not use the management companies but don’t quote me on that.

As far as where the price can come in at, it depends mostly on comps but concessions can play into it as well. SO for this situation, 8k below list price is, well, 8k below list. Ask the seller to reduce the price or the buyer needs to come up with the money. As far as the appraiser thinking that the price was different… well… that sounds like the appraiser kind of boofed it.[/quote]

Shouldn’t the house be appraised based on comps, local rents, etc.? Whatever deals the buyers and sellers have regarding concessions, etc. should have no bearing on the appraised value, and the condition of the property should be noted during the appraisal, no?

[CA renter]

[quote=SD Realtor]CAR the appraisers need to see the contract more for conditions/concessions then the price. Appraisals are done differently these days. Now independent appraisal management companies have been created. For most (but not all) loans the appraisal is ordered by the lender, the order is received by the management company, they contact an appraiser who goes out and does the appraisal. The appraisal is then submitted back to the management company who usually does their own review of the appraisal and then they send it to the lender. Copies could be made available for the party paying for the appraisal. I say most but not all because I think certain lenders like credit unions do not use the management companies but don’t quote me on that.

As far as where the price can come in at, it depends mostly on comps but concessions can play into it as well. SO for this situation, 8k below list price is, well, 8k below list. Ask the seller to reduce the price or the buyer needs to come up with the money. As far as the appraiser thinking that the price was different… well… that sounds like the appraiser kind of boofed it.[/quote]

Shouldn’t the house be appraised based on comps, local rents, etc.? Whatever deals the buyers and sellers have regarding concessions, etc. should have no bearing on the appraised value, and the condition of the property should be noted during the appraisal, no?

[CA renter]

[quote=SD Realtor]CAR the appraisers need to see the contract more for conditions/concessions then the price. Appraisals are done differently these days. Now independent appraisal management companies have been created. For most (but not all) loans the appraisal is ordered by the lender, the order is received by the management company, they contact an appraiser who goes out and does the appraisal. The appraisal is then submitted back to the management company who usually does their own review of the appraisal and then they send it to the lender. Copies could be made available for the party paying for the appraisal. I say most but not all because I think certain lenders like credit unions do not use the management companies but don’t quote me on that.

As far as where the price can come in at, it depends mostly on comps but concessions can play into it as well. SO for this situation, 8k below list price is, well, 8k below list. Ask the seller to reduce the price or the buyer needs to come up with the money. As far as the appraiser thinking that the price was different… well… that sounds like the appraiser kind of boofed it.[/quote]

Shouldn’t the house be appraised based on comps, local rents, etc.? Whatever deals the buyers and sellers have regarding concessions, etc. should have no bearing on the appraised value, and the condition of the property should be noted during the appraisal, no?

[CA renter]

[quote=SD Realtor]CAR the appraisers need to see the contract more for conditions/concessions then the price. Appraisals are done differently these days. Now independent appraisal management companies have been created. For most (but not all) loans the appraisal is ordered by the lender, the order is received by the management company, they contact an appraiser who goes out and does the appraisal. The appraisal is then submitted back to the management company who usually does their own review of the appraisal and then they send it to the lender. Copies could be made available for the party paying for the appraisal. I say most but not all because I think certain lenders like credit unions do not use the management companies but don’t quote me on that.

As far as where the price can come in at, it depends mostly on comps but concessions can play into it as well. SO for this situation, 8k below list price is, well, 8k below list. Ask the seller to reduce the price or the buyer needs to come up with the money. As far as the appraiser thinking that the price was different… well… that sounds like the appraiser kind of boofed it.[/quote]

Shouldn’t the house be appraised based on comps, local rents, etc.? Whatever deals the buyers and sellers have regarding concessions, etc. should have no bearing on the appraised value, and the condition of the property should be noted during the appraisal, no?

[SD Realtor]

CAR what you are saying makes sense but how then does anyone know the difference. Two homes with similar layouts, and square footage, sell and one had concessions spelled out in the contract and one did not then how does the appraiser know?

Wouldn’t that lead to an appraisal that was incorrect?

BTW I do agree that the way it works now with the contract being viewed by the appraiser is not something I agree with either. Don’t get me wrong there needs to be a better way. Also lets not forget the appraiser doesn’t know of any of the loan mods in the area as well, (to me this is more damaging then having the contract) so what can you do.

What also sucks is that some appraisers do not even check on the condition of the comps that they use. Some do call the agents for those closed sales and some do not.

Anyways, lots wrong with the way it was done, and I don’t agree with them seeing the contract but I am telling you what they have told me.

[SD Realtor]

CAR what you are saying makes sense but how then does anyone know the difference. Two homes with similar layouts, and square footage, sell and one had concessions spelled out in the contract and one did not then how does the appraiser know?

Wouldn’t that lead to an appraisal that was incorrect?

BTW I do agree that the way it works now with the contract being viewed by the appraiser is not something I agree with either. Don’t get me wrong there needs to be a better way. Also lets not forget the appraiser doesn’t know of any of the loan mods in the area as well, (to me this is more damaging then having the contract) so what can you do.

What also sucks is that some appraisers do not even check on the condition of the comps that they use. Some do call the agents for those closed sales and some do not.

Anyways, lots wrong with the way it was done, and I don’t agree with them seeing the contract but I am telling you what they have told me.

[SD Realtor]

CAR what you are saying makes sense but how then does anyone know the difference. Two homes with similar layouts, and square footage, sell and one had concessions spelled out in the contract and one did not then how does the appraiser know?

Wouldn’t that lead to an appraisal that was incorrect?

BTW I do agree that the way it works now with the contract being viewed by the appraiser is not something I agree with either. Don’t get me wrong there needs to be a better way. Also lets not forget the appraiser doesn’t know of any of the loan mods in the area as well, (to me this is more damaging then having the contract) so what can you do.

What also sucks is that some appraisers do not even check on the condition of the comps that they use. Some do call the agents for those closed sales and some do not.

Anyways, lots wrong with the way it was done, and I don’t agree with them seeing the contract but I am telling you what they have told me.

[SD Realtor]

CAR what you are saying makes sense but how then does anyone know the difference. Two homes with similar layouts, and square footage, sell and one had concessions spelled out in the contract and one did not then how does the appraiser know?

Wouldn’t that lead to an appraisal that was incorrect?

BTW I do agree that the way it works now with the contract being viewed by the appraiser is not something I agree with either. Don’t get me wrong there needs to be a better way. Also lets not forget the appraiser doesn’t know of any of the loan mods in the area as well, (to me this is more damaging then having the contract) so what can you do.

What also sucks is that some appraisers do not even check on the condition of the comps that they use. Some do call the agents for those closed sales and some do not.

Anyways, lots wrong with the way it was done, and I don’t agree with them seeing the contract but I am telling you what they have told me.

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