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June 8, 2009
Help with crazy appraisals
I'm trying to refinance a jumbo loan on my 2-family brownstone. The bank did two appraisals, which they said was standard procedure for jumbos in our market. One was $750K lower than the other!! It's a 50% difference in the value!! To tell you the truth I think both numbers are out of whack, if I had to guess I would have picked somewhere in the middle. The bank is insisting on using the lower number and won't approve me, no matter how much I try to point out the absurdity of the delta. And they ignore my own information. They've offered to do a third appraisal (on my dime of course) but won't guarantee they'll use it and anyway with two wacko numbers I just think I'll get a 3rd crazy number. Anyone else run into this kind of issue??
Comments
What do websites like zillow, Trulia and chase property value sites show the property to be valued at ?
Posted by: guikazoid at June 8, 2009 9:50 AM
Let Adam Dahill weigh in on this. I beleive this is along the lines of the appraisal complications he has been warning about with the new regs....
Posted by: newsouthsloper at June 8, 2009 9:59 AM
I am also in the process of refinancing my 3-family home. The bank sent an appraiser who came up with three different appraised values: sales comparison approach, income approach and cost approach. Obviously the bank only considered the smaller value given by the sales comparison approach. I did all what I could to appeal for a higher value; it did not work. As a result I need to bring down the loan amount in order to meet the 80% LTV requirement.
Was your lower appraised value based on a sales comparison approach? If it was, I am afraid there is nothing you can do to appeal for a higher value. What can save you is that some properties similar and close to yours were recently sold (after your appraisal was made) at a price closer to what you want. Then you could suggest those comps to the appraiser for the third appraisal.
Good luck!
Posted by: lostintranslation at June 8, 2009 10:31 AM
Crazy on the way up (greed), crazy on the way down (fear). There's no free lunch. Accept the new reality.
***Bid half off peak comps***
Posted by: Brownstones Half Off at June 8, 2009 11:36 AM
Zillow and Trulia are completely useless in Brownstone Brooklyn. Do you think a computer understands that a 20-foot brownstone is worth a hell of a lot more than a 16-foot brownstone?
They do a good job in places like suburban Dallas.
Posted by: Suburbandude at June 8, 2009 11:46 AM
Suburbandude: U r so right.
Posted by: sebb at June 8, 2009 12:01 PM
Ha... what's the saying? DeNial ain't a river in Egypt.
Posted by: goodoleboy at June 8, 2009 12:04 PM
Banks dont want to get burned again. They dont even want to loan In NYC until prices come in more. My buddy works for a risk man. company that the banks use to determine how risky a loan is. Metro ny has been red flagged . NYC has a bout 30 percent more to drop and they dont want you to owe more then youre house is worth.I think if you have liquid assets it is much easier.
Posted by: brickoven at June 8, 2009 1:39 PM
Soooooo....is there someplace where they *are* making loans? How are they doing? I think New York City has been red flagged because some areas have dropped 40 percent or more.
Posted by: mopar at June 8, 2009 3:15 PM
NYC has a bout 30 percent more to drop and they dont want you to owe more then youre house is worth...
Um, no. They're worried that there's a nationwide housing crash. They don't know where this will end or how New York will be affected. They don't trust their own models, because their models told them what's currently happening could never happen.
New York has very expensive housing. If New York housing values decline, they will lose more money than they will lose in other places, even if the percentage decline in New York is lower than in other places.
So, they are being incredibly risk-averse in New York. This may be a smart thing for them do to--prices may decline because of market fundamentals. They may also create a self-fulfilling prophecy: if enough banks behave irrationally they'll force a decline in values by refusing to give people with good credit big enough loans. They may be wrong, and credit will gradually loosen up as the panic we're currently in subsides.
Basically, they're hoarding cash and want to justify it. It's the opposite of irrational exuberance, and driven just as much by emotions rather than any real sense of the fundamentals.
But that's why they're screwing New York. Expensive property means more cash out the door and more risk. They want to buy T-bills, just like everybody else these days.
Posted by: bkrules at June 8, 2009 3:57 PM
I had the same problem recently. First appraisal was absurdly low. I fired back at the bank with all the comps in my neighborhood and pointed out how absolutely off they were. I think they really wanted my business because my credit is good, so they sent out another appraiser and I got the right number. I was very persistent with them. Luckily there was a house in contract on my block very similar to my house with a good selling price. I told them I have the proof and I was going to hold them to the facts or charge them with fraud.
If your bank is not cooperating, go with another institution.
Posted by: tomgee at June 8, 2009 7:33 PM
OP, where is your bank located? It makes a difference. I can't even get online rate quotes because out-of-state banks aren't set up for 2 and 3 family dwellings. Go to propertyshark and get comps from there. They are accurate since they use recorded data. Also, your bank won't be able to dipute those. Good luck with your refi!
Posted by: i_heart_brooklyn at June 9, 2009 5:43 AM
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