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towerdave
join:2002-01-16
O Fallon, IL

1 recommendation

towerdave to Lurch77

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to Lurch77

Re: Home Appraisal - How to Increase

When we refinanced, we put together a little booklet that listed all the renovations/upgrades we had done to the house since we purchased it. The big one being a brand new kitchen. I think this helped a lot. Our appraisal came back VERY high, way more than we needed for the refi. If someone would have offered me that price on our house that day, I might have sold it on the spot.

I'm not an expert, but my dad was an appraiser for a number of years after being a real estate broker for a number of years, so I've learned a bit from my parents. My mom just retired from being a broker as well.

The way it worked many times for him is that he would do the appraisal, and then the bank would come back and ask him if he could justify it being just a bit higher to meet the requirements of the loan. So there is wiggle room there. My dad is a straight arrow person, so he would only do that if he could honestly make it work. I'm sure appraisers aren't as honest and will do whatever it takes to make the person who paid them happy.

Basically, an appraiser is going to measure your house, and then compare it to recent sales in the area that are close, and do +/- for major differences. For example, if Comp 1 has an older kitchen, but yours is brand new, you get a + for that. If Comp 2 has a 3 car garage, but yours is only 2, you get a - for that. And so on. This is especially important in a neighborhood with many houses of the same basic floor plan. So yes, appearance and condition matter when it comes time for the wiggle room.

That's most of what I know.

TD

DarkHelmet
join:2014-02-21

4 edits

DarkHelmet

Member

said by towerdave:

Basically, an appraiser is going to measure your house, and then compare it to recent sales in the area that are close, and do +/- for major differences. For example, if Comp 1 has an older kitchen, but yours is brand new, you get a + for that. If Comp 2 has a 3 car garage, but yours is only 2, you get a - for that. And so on. This is especially important in a neighborhood with many houses of the same basic floor plan. So yes, appearance and condition matter when it comes time for the wiggle room.

I posted some images of my last 2 appraisals so the OP can see how that works.

You don't want to know what the pictures look like in the appraisals. I can attest to staging, cleaning, etc. meaning nothing! Not to mention there's not even a place to grade that on the sales or cost approach form for the appraiser.

Here's the guidelines the appraisers use.
»www.fanniemae.com/conten ··· 2013.pdf
cjski
The Wheel Weaves As The Wheel Will
Premium Member
join:2001-01-04
Sun City, CA

cjski to towerdave

Premium Member

to towerdave
said by towerdave:

When we refinanced, we put together a little booklet that listed all the renovations/upgrades we had done to the house since we purchased it. The big one being a brand new kitchen.

This is very helpful...at least to me.

I don't need a 'book', I don't need to see pictures of before and after...just a nice concise list of upgrades performed, and when they were done.

I'm not an expert, but my dad was an appraiser for a number of years after being a real estate broker for a number of years, so I've learned a bit from my parents. My mom just retired from being a broker as well.

The way it worked many times for him is that he would do the appraisal, and then the bank would come back and ask him if he could justify it being just a bit higher to meet the requirements of the loan. So there is wiggle room there. My dad is a straight arrow person, so he would only do that if he could honestly make it work. I'm sure appraisers aren't as honest and will do whatever it takes to make the person who paid them happy.

This is a strict violation is illegal per the Dodd-Frank Act that was enacted in 2010 I believe...

...However, prior to legislation after the crash, it did happen. Lenders would in effect, strong arm some appraisers along the lines of "...no value, no work...". Most appraisals nowadays are ordered thru an Appraisal Management Company (AMC). This is, theoretically, supposed to act as a 'firewall' between the appraiser and the lender, however, the largest AMCs are owned by...the banks.

There is a system in place 'Request For Value Reconsideration" in which the lender can request the appraiser to reconsider the value, but they must provide data for the appraiser to analyze, i.e additional comparables, etc...

Basically, an appraiser is going to measure your house, and then compare it to recent sales in the area that are close, and do +/- for major differences. For example, if Comp 1 has an older kitchen, but yours is brand new, you get a + for that. If Comp 2 has a 3 car garage, but yours is only 2, you get a - for that. And so on. This is especially important in a neighborhood with many houses of the same basic floor plan. So yes, appearance and condition matter when it comes time for the wiggle room.

For the most part, correct.
towerdave
join:2002-01-16
O Fallon, IL

towerdave

Member

said by cjski:

This is a strict violation is illegal per the Dodd-Frank Act that was enacted in 2010 I believe...

He never said that it was a demand, and he retired before that law was passed. And like I said, he would only do it if he could justify it. He was an independent contractor for an appraisal company.

TD
Critsmcgee
join:2011-12-02

Critsmcgee

Member

said by towerdave:

said by cjski:

This is a strict violation is illegal per the Dodd-Frank Act that was enacted in 2010 I believe...

He never said that it was a demand, and he retired before that law was passed. And like I said, he would only do it if he could justify it. He was an independent contractor for an appraisal company.

TD

It doesn't have to be a demand to act like a demand. If your boss or CO suggests you do something you're going to do it. It's not a demand or order but it's inferred.