How does do it typically take to get your appraisal back and how did you respond to it if it was unfavorable(more than 10% off a private appraiser)?
Context, I got a private appraisal(favorable) and it was back within 3 days. The bank appraisal was completed and submitted same day(appraiser let me know) but still waiting around a week later. It's probably normal but I'm waiting and hoping it'll be relatively close.
@Chris Shue my experience is that it is usually 2-3 days after the bank has received the appraisal. The banks I work with have an appraisal review process.
If the bank's appraisal comes back lower than expected, I would reach out to the appraiser and send him comps supporting your value. I also would send the private appraisal (assuming that was done by a certified appraiser).
@Will Gaston Thanks for the feedback. They said I would have to wait until after the review process to see the appraisal. I'll send them another follow up.
@Chris Shue agreed, 3-5 days. Stay on them but keep in mind that you have a cook in the kitchen still. Don't make them angry or they might spit in your food. Just give them some friendly checkin's because you need that appraisal to be good.
@Andrew Postell thanks for the insight. the appraiser told me it was submitted back to the bank. As a lender would there be a reason why they wouldn’t just disclose it to me right away ? The lender said it needed to go through their review team first before they could send it over?
@Chris Shue I just did a cash-out refi and it took several weeks. There weren't any issues, just the usual slowness of banks
@Chris Shue some lenders will be different with this process but yes, they may not show you the appraisal until they fully approve it. Lean on your loan officer to at least tell you the value so you know. They should be able to share that with you without sending you the entire report.
@Andrew Postell thanks! He told me to wait. Sounds like the review team won’t share with him until they’re done. So guess that’s my only option for now.
@Chris Shue I wouldn't be too concerned. To be honest, most lenders are busier right now than they ever have been. It's very likely a simple bandwidth issue why they wouldn't review and sent it to you right away. Honestly, as of July 21 ,2021, if any lending company isn't absolutely slammed they must be doing something wrong. The demand for this cheap debt is insatiable. Hope the results came out favorable! Good luck!
@Chris Shue I have had zero luck getting an appraisal changed significantly. A few times I've gotten one up 3-5%.
You're not going to want to hear this but when this happens to me I pay for the appraisal and go to a different lender. Appraisals can be all over the place. Just had a duplex done twice this year and one came in at 440k and another came in at 350k. Both third party, independent appraisers that have lots of experience.
Sometimes it's a crapshoot.
@Will Gaston that’s helpful! I’ll work on getting my back up lender ready to go. The loan processor I talked with agreed that the comps used were old as well. One was nearly a year out and another 6+ months. Not sure why he threw out all of the ones within 3months.
Originally posted by @Chris Shue :
@Alex Bekeza @Will Gaston @Andrew Postell got an updated appraisal (89.7k)and it was half of my private appraisal $161k. So going through the dispute process to update. Let me know if anyone has any tips.
For one of my BRRRRs the appraisal came it at 50K and I submitted a value reconsideration and it got updated to 90K. Here's from an old blog post i wrote -
4 Tips for a Value Reconsideration Request
- Look for objective factual errors in appraisal report. Verify all the data the appraiser used on your property and the comps. Check the MLS for the comps used – verify the square footage, understand why the appraiser picked that comp, and try to find pictures from the previous listing. What condition was the comp in? What adjustments did the appraiser use and are they fair based on the local market demand? If the appraiser used an Income valuation method, what was the market rent they used in their evaluation? To share an example of an error I found, the appraiser had used a property that was a flip (I could tell because it had been purchased off the MLS and relisted a few months later and had obviously just been fully rehabbed). The problem was that the appraiser used the value from the pre flip sale, but my property was much closer in condition to the property post flip. Check out a screenshot of the actual report below.
- Present your better comps and explain why they are better. Again, understand why the appraiser used the comps they did. Are the comps you have more recently sold, closer to your property, in similar condition? What makes the ones you picked better? In my experience, appraisers are open to looking at what you present to them as long as you’re respectful and not wasting their time with comps that are obviously worse.
- Explain the neighborhood highlights. Things such as good school systems, recent new developments in town, a large new employer, or city funded revitalization projects all are good examples of things that can positively affect local market prices.
- Highlight the renovations you’ve made to the property. Some things that are not obviously seen when walking through a home for the first time could be upgraded electrical, plumbing, foundation work, or roof work. These are all expensive items that add longevity to your property and increase its value.
If all else fails, I would check with your lender to see if they have any other options.
@Chris Shue all of us are CRAZY busy so i am not surprised when it takes 3 weeks to get a report back AFTER the inspection has been completed. This is the sort of wait and hassle that comes with too few appraisers and too many deals.
@Dan Portka thanks Dan! Good stuff! I noticed a few objective things in the report.
1. Proximity and recent home comps were further out and 6+ months out.
2. Rent comps were significantly lower. Current is $1050 and comps were $700,800,895.
3. Appraiser noted that no remodels were completed within last 15 years. So I included the SOW for $18k of work done.
I'll report back when I hear back from the review. But agree might need to cut lines and get a new lender to start fresh. I need around a 145k appraisal to get a full BRRRR.
@Chris Shue all 3 are strong points, good luck!!
Update: appraiser didn’t make any changes. Didn’t agree. Learnings from this was that they don’t account for listed homes like in California. Regardless he didn’t make any changes to the report based on condition of the home even to account for the SOW, recent sales price, and current rent.
On to the next lender.