Needing advice on appraisals

[David Schlatter]

I have a question on appraisals. This is the first time I ran into this.  I am purchasing 2 -4 plexs, the bank approved them and hired an appraiser. The appraisal came back at $120,000 under purchase price. We  bought 3-4 plexs 1 yr ago 1 block away. Same exact building but these we are purchasing now are much nicer, rehabs are done and rents are $200 a month higher.  Last year a different appraiser did those and they were  $75,000 a building higher than our new appraisal. On top of that we had them appraise 3 other 4 plexs we owned so we had equity to use for more purchases. They were appraised 2 yrs ago for $245,000 per building.  The new appraiser did them at $160,000 per building.  Can I argue this? Can i reject the appraisal? Her comps are horrible her cash flow analysis is crazy that she used also.  The bank told me it is up to me what i want to do.  

thanks

David

[Doug Smith]

When you see an appraisal come in this far off from both market reality and recent like‑kind properties you already own, it's absolutely reasonable to challenge it. You can request a Reconsideration of Value (ROV) and provide stronger comps, rent rolls, rehab details, and prior appraisals to demonstrate why the valuation is unsupported. Banks can order a second appraisal if the first report shows clear issues with comparable selection, cap rate assumptions, or income analysis. Multifamily valuations are highly sensitive to the appraiser's approach, so a misapplied income method or poor comp selection can easily swing value. Since your lender said it's your call, pushing for an ROV or a new appraisal is the right next step. The other question I would have is was this ordered through an AMC (appraisal management company). Did they do a review? If you're going to argue it, you need to make sure you are coming loaded for bear with better comps...not cherry picked, but better...than the appraiser did.