thistime Posted February 14, 2009 Share Posted February 14, 2009 I put an offer in on a house, and it was accepted, but closer to closing, when the appraisal was done (by a company of the banks choosing) the house appraised waaayyyy lower then it should because they didnt compare it to homes in the same town!! They comped it with houses in a town 20 miles away, and the market is totally different there. is this normal? Can I request (demand?) another appraisal, and have it comped to the area in which I will be residing? this inaccurate value assessment raised my closing fees from 3,000 to over 5,000 dollars, I think I'm being screwed!!! any advice (some bankers or realtors out there anywhere?) Link to comment
scorpio47 Posted February 14, 2009 Share Posted February 14, 2009 Hi - I work for a bank as a mortgage loan officer. Banks have certain rules as to the recency of the comps. Certain areas will have pretty unique properties within a given area, so if there are properties that were sold in your area, but vastly different to yours, the appraiser can use those comps and the adjust value for the discrepancies. It seems odd that they would use one THAT far away, but it's not completely unheard of either. Not sure if you can request another appraisal because appraisers typically have to be on the bank's approved list of appraisers. Where were the other comps? Typically you'll see 3-6 comps on an appraisal. How far were the others? How much lower was the appraised value than the selling price? Being that you're the buyer, it should give you some negotiation ability. Why were your closing fees RAISED because of the lower appraisal? That makes no sense to me. Please let me know. Link to comment
thistime Posted February 14, 2009 Author Share Posted February 14, 2009 I havent actually seen the appraisal, but from what my realtor told me, after she spoke with the mortgage broker, that they were all comped to houses out of town. The appraisal valued the home at 40,000 less then what my mortgage is for, so yes, my fees went from 3500, to 5200 in order to close. Thats alot of Jack!! Link to comment
scorpio47 Posted February 14, 2009 Share Posted February 14, 2009 Hmm...interesting. Something about that definitely does not sound right, but I'm not sure what you can do at this point in the game. How much time do you have before the contract expires? Is there time to get another loan officer involved? The market right now is VERY hard for mortgage brokers, and some of them are stooping to some unscrupulous measures to survive. I'm NOT accusing your mortgage broker of doing this, but know that it is a possibility, though I'm not quite sure how he could benefit from the appraisal coming in low. I'm assuming that the increase in your cash to close is because you're making up for the difference in value since the broker can only lend a certain percentage - is that right? Link to comment
thistime Posted February 14, 2009 Author Share Posted February 14, 2009 yes, that is the cost difference. I lay more of the blame at the feet of the appraiser, but I spoke with my broker today, and he is looking into some other programs that may keep my costs at what were originally speculated... Link to comment
FortunateOne Posted February 15, 2009 Share Posted February 15, 2009 I'm in banking and I need more details of the transaction. Is it a FHA, VA or Conventional loan? How much down payment is required? Are there seller concessions towards escrow? Have you received your RESPA disclousures with a Good Faith Estimate and an estimated settlement cost disclousure? Do you have a hard copy of the appraisal? Was there an appraisal contigency in the purchase offer? To me, it looks like the Realtor is misimforming you to cover up a mistake since the price decrease will not increase your closing costs, points, fees, and property taxes. If anything, the lower price should reduce your out of pocket cash. Another note to remember is that in this market the buyer has control; thereforee, the seller will have up choice to sell unless he keeps it for another 10 years before the market may give him the asking price. I seriously believe that there's something wrong with how the Realtor is presenting the transaction. Please get me more info onthis matter to better serve you. Link to comment
thistime Posted February 17, 2009 Author Share Posted February 17, 2009 Loan officer told me that because the home appraised at a much lower value then price offered (4000 dollar difference) that I would need to come up with $5200 for closing. Link to comment
FortunateOne Posted February 17, 2009 Share Posted February 17, 2009 How bad do you want this house? Link to comment
thistime Posted February 17, 2009 Author Share Posted February 17, 2009 considering the fact that I have sold the tiny house I live in now, and really think it is a good deal....pretty bad. the banker is looking into another program that may keep the cost more consistant...but that would push the closing off for another 3 weeks... Link to comment
FortunateOne Posted February 17, 2009 Share Posted February 17, 2009 Here's what I would do... I'd ask the seller's and your Realtor agents to kick in half a percent (50 basis points) of their commission, then I'd ask the lender to kick in one percetage point (100 basis points) of the "Service Release Premium" and commission points. This total of two points should be enough to make up the difference. One thing I don't understand is how the FHA Derict Endorsed underwriter is allowing a transaction that's over 100% loan to value (LTV). This is not something the federal loan guarentee insurance program would not do in a decreasing market. Something is not right here. Federal law allows you the right to receive a copy of the appraisal. Call the loan officer up and demand to get a copy today. This is crucial since it determines their true intent. BTW, the Realtors are making 2.0% commission each and the lender is making at least 2.5% too. Link to comment
thistime Posted February 17, 2009 Author Share Posted February 17, 2009 OK, thanks for the advice!! Link to comment
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