Help! My appraiser's an idiot

12 Replies

I met with my appraiser a week ago on a refinance for a four plex I own, and I provided her with comps in addition to an income based valuation worksheet already filled out to "assist her". Everything that I can find comp wise and through income shows this property valuation between $220-205K. I got the appraisal today and her numbers were $165K! When I look at her comps I see two duplexes, One is brand new construction and the other is a total pile of crap ($238K and $113K respectively). Then I see she used a triplex which is also a pile of crap, makes less money than mine, but still sold for $175K two months ago! What can I do to fight this? 

Probably just have to hire a new one

Just ask why she did not use the comps you supplied and why she thinks hers are better.  There's your answer.

The appraisal on 4 plexes or less are all used based on Sales Comparables and Never on Income approach. With that said, they need to at least find like kinds. 

You will need to get a rebuttal form from the lender to see if you can provide additional SOLD comps that help justify your number. 

Around here when dancing on the threshold of multi-unit,  the appraisers will normally do an income-based approach in addition to comps.   

Of course, I swear they often champion the least favourable one {to us} over the other - depending on whose paying for the appraisal and for what purpose.

Thanks @Roy N.   The appraiser gave me both a cost to build valuation (only $56 per Sq/Ft) and an income valuation with a totally screwed up net income and cap rate. I am just so blown away that she used properties with a $100,000 difference in prices as comps on a $200,000 property.

$56 per ft^2 ... Wow!  You might be able to build a garage for that price around here.

I wouldn't worry about the CAP rate ... if the rent schedule; operating cost inputs; and allowances (vacancy, maintenance) are correct (known values) or realistic (allowances), the NOI should speak for itself.

Any chance she's working backwards from a CAP rate prescribed by the bank? ... seems unlikely for a 4-plex, but we had a 24-unit fall apart because the Appraiser was instructed to determine a price at a prescribed CAP {which was 2% higher than anything which had moved in the past two years}.

Was this appraiser one you hired or one hired by the lender who will refinance?

Joe Gore

@Joe Gore  Hired by the lender, but I have used her on 10-12 other deals and been happy.

@Mike Sattem

You might want to step back and not try to sway the appraisal because they know their job, and if you don't like the outcome dispute it, and some lenders will back away when a borrower suggests anything. Just be on the safe side and get it refinance.

Joe Gore

@Mike Sattem  Dude are you venting or looking for a solution?   Made that mistake twice.  Happily living with man's best friend since I figgered the rules. 

Where did you get your cap rate comps? Post your income & the appraiser's.  let us appraisers give you some help.  Venting?  I can't believe she turned on you after all you've done for her.  Are you working out?  You're looking buffer. 

It seems like appraisals for refinances come in a lot less than appraisals for purchases.

I had an appraisal on a duplex, and they compared a completely remodeled duplex against 3 completely foreclosed, trashed duplexes.  And they claimed those were "comparables".

Hey Everyone, I appreciate the support. I think I have it all figured out, as I have found that she reduced my usable sq/ft by 500 to account for my common areas, but did not do this for the comps, thereby producing an inaccurate price per sq/ft. This change should give about $15k in extra value and get me closer to a true value. She also had my rents at $1350 because she thought one of the units was vacant when it is in fact not, so that extra $400 per month will assist in the value as well.

@Bob Bowling  Thanks for noticing that I have been working out :) This is why I love this community!

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