C of O Confusion Muddying Appraisal
I need help with an appraisal. We are buying a great house in Bed stuy, asking price $650k, we bid $684 in a busy field and won. Its in amazing condition, all victorian attributes intact, seller paid for a new roof etc. Great area, two blocks from subway. Its a legal two family, but used…
I need help with an appraisal. We are buying a great house in Bed stuy, asking price $650k, we bid $684 in a busy field and won. Its in amazing condition, all victorian attributes intact, seller paid for a new roof etc. Great area, two blocks from subway. Its a legal two family, but used as a one family. Because of this the appraisals are coming in almost $100k too low. Does anybody have any experience that could help us?
Can anyone recommend some high-balling appraisers who are familiar with the bed-stuy area?
Thanks
The appraisal process was by far the most stressful part of buying my brownstone. The only advice I can give is to use a local bank (Citi, Chase, etc) or a local mortgage company (everyone who has ever bought has a recommendation). They are the only people who know this unique market and use local appraisers. Good luck!
Things have been so crazy in these neighborhoods over the past year. I believe that the housing prices won’t go DOWN, but other people continue to debate whether the bubble will burst and prices will either plateau or go down.
That NY Magazine article recently rated the risk factor by neighborhood. Clinton Hill, Fort Greene, etc., came in relatively low on the risk scale, but Bed Stuy was still at a high 7.5/8.5? Something like that…due to ‘stubborn crime’, lack of restaurants, movie theaters, etc. But it’s a great place and if you love it and want to live there, think long term and forget about the risk factor (unless you’re a flipper!). Maybe the appraisers are considering these same kind of risk factors and being conservative, but, even so, your appraisal should easily come in much higher than that.
Definitely forget the LI appraisers, they are not up to speed on what’s going on in our ‘hood. WHY are banks still using them? We’re all getting burned this year by banks using their out-of-date comps. It’s time to use appraisers from our own neighborhood. Things are changing so quickly here, that maybe until things do ‘plateau’ they should use appraisers who live here and can stay up to the minute on this rapidly changing scene.
There was a recent article in the Times about this very problem. Some appraisers are not buying, no pun intended, the over inflated prices, and being more conservative. Our appraisal was knocked down by a church on the corner. Street parking being scarce on a Sunday, lowers your property value.
Who are you financing with? A good mtge broker should be able to pick a good appraisal company that knows Bed-Stuy and surrounding areas.
If it is a legal 2 family, the appraisal shouldn’t be off by 100K. They could make some kind of minor adjustment for the missing kitchen, but that’s it. LI appraisers are the WORST!!!
Are you working with a bank or a mortgage broker? If the bank already has the appraisal, it may be very difficult to raise the value or get them to order a new one. A mortgage broker may be willing to work with you.
Our first appraisal came in slightly low, and we tried to fight it by providing 10-15 comps from our realtor. The appraiser refused to raise the value, but the bank finally agreed to order a new appraisal. This time it was a drive-by — the appraiser didn’t even go inside the house. He dropped the value another 100K, and the bank now wouldn’t even accept the previous appraisal since it had this one on record. It was a nightmare.
We kept fighting it, but ended up having to scramble and find another lender at the last minute. If your bank won’t budge, let me know and I’ll give you the name of ours. They understand the market and have no probem getting a Brooklyn appraiser to make a FAIR appraisal based on reality and not their own prejudices.
My appraiser got comps at around $550k so I spoke to a guy in our neighborhood who is a realtor. He gave me some addresses of houses he had recently sold or were in contract at $670K, $725K, all 2 families like mine. I passed these on to the appraiser and it brought the appraisal up.
Because of the massive leap in prices, if you can include houses that are in contract but not closed yet then you should do ok. Some of the houses in my appraisal were a month away from closing.
Don’t worry you’ve come this far I’m sure it will work out. Most appraisers know its a hot market so they will work with you, even if they are as surprised as anyone by the escalating values.
the broker should help find a knowledgable appraiser. she/he should also have the comps ready right away. That’s the kind of stuff that seperates the better brokers from the rest.
Post-er #2 here again:
Huh, interesting. Haven’t heard of that kind of loan before…will ask my broker about it, thanks for sharing.
Yeah, is there any way you can get a local appraiser? These L.I. appraisers don’t seem to be able to get their heads around how nuts the prices have become over here this past year. There is an appraiser on my block (I wish I knew him then) who said that without looking inside our house, he guessed it to be at 1.25, easily. That is quite a remarkable difference from the 850k the L.I. appraiser reported.