Okay, I must admit, I’m a little bit worried about the bank’s appraisal for the sale of The DIY House…
The buyers are getting a VA loan, and the appraiser came out today. I met him at the house, and was hoping to walk away confident that the appraisal would come back well above where we needed it to be; to be honest, of all the houses we have done, this was to be — what I thought — was the easiest appraisal. The house is selling for $127,500, and I imagined the market value would be somewhere in the low- to mid-$140K’s.
Anyway, I met the appraiser at the house, and the first thing I said (with a smile) was, “So, we’re not going to have any issue hitting our number on this one, are we?” He just gave a little laugh that sounded to me as if he was saying, “Yeah, right. Good luck, buddy.”
After talking a bit more, I think he explained that he couldn’t use repairs/renovations in the house to impact the appraised value, which didn’t make any sense to me; generally, things like new cabinets, all new flooring, lighting, paint, etc, should increase the appraised value relative to the comps, at least according to previous appraisers I’ve worked with. Part of the issue I had was that the appraiser had had mouth cancer, and had part of his tongue and jaw removed. It was very difficult to understand what he was saying (at least at first), and I felt bad asking him to repeat things multiple times. So, I didn’t really get the details behind not using the renovations as part of the comp analysis. I’m not sure if I misunderstood, or whether that was something specific to do with the VA appraisal process or even something specific to how he did comps.
He then went on to tell me that he could only find two comps in the subdivision, and that he’d have to use foreclosures to make up the rest of the comps! And again, he alluded to the fact that I should be doing the very minimum in repairs, as they didn’t really help my appraisal. Ugh.
Anyway, he took measurements, strolled around the house taking a few notes, and then wrapped up. Didn’t take pictures, didn’t ask many questions, and didn’t spend very long at the house at all. He did spend long enough to tell me how screwed up the VA, HUD, and FHA rules were, and to reiterate that I needed to start doing much more minor rehabs if I wanted to hit my appraisal numbers.
When he left, I again asked if he thought we could make our number, and he again laughed under his breath. He said he’d be done with the appraisal tomorrow, and would call us “if there were any problems.” When I got home, I took a look on the MLS, and it’s true that there aren’t many comps in the past 12 months. If we could go back 14 months, there are a couple newer and bigger houses that sold for much more than ours, but I’m guessing he won’t go back that far, nor will he use these other houses as comps.
While I agree that there aren’t many comps for this house, it still surprises me that we may not hit our number, just given the 1-2 year sales and the condition of the house.
I’m curious if there’s any recourse to a low appraisal…can I ask for a do-over? Can I request another appraiser? Or am I stuck with this appraisal with this lender, and that’s all there is to it?