We Accept Appraisals Transferred From Other Lenders

We have several lending sources that accept transferred appraisals (appraisals ordered by or prepared for other lenders). This is significant b/c for years no lender would accept another lender’s appraisal, especially since HVCC guidelines went into place. Not having to order a new appraisal for a borrower seeking JVM’s superior rates, service or loan programs […]Read More

Appraised Value Is Not Market Value; Solution?

We have a transaction in which two buyers (both are clients of ours) are more than willing to pay $1.2 million for a property in Oakland with an appraised value of only $950,000. There are probably more buyers in the wings willing to pay a similar price. The appraisal came in so low b/c of […]Read More

Comparable Sales Guidelines for Appraisals

We often get comparable sales (comps) from Realtors and borrowers that we cannot use b/c they fall outside of guidelines required by appraisers. Below are the basic criteria for valid comps: Size: Comps need to be within 20% of the size of the subject property.  For example, we usually cannot use a 1,300 sqft comp for […]Read More

Appraisal Horror Story – If Appraisers Only Knew the Damage Caused

Appraisal Came In Low We had an appraisal come in at $559,000 yesterday, a mere $2,000 below the purchase price of $561,000. It was the “2nd appraisal” for a transaction requiring two appraisals. We were confident about value, so we drew loan documents based on the first appraisal. In addition, the borrower had signed and […]Read More

FHA Issues Are Also “Conventional” Issues With Respect to Appraisal

We recently had a purchase of a home with a completely gutted bathroom (down to just drywall, plywood and pipe-ends). The Realtors did not want an FHA purchase because they were afraid the bathroom could not pass FHA scrutiny. But, FHA scrutiny will be the same as Conventional or Fannie Mae scrutiny in this case. […]Read More

Unpermitted/Illegal In-Law Units; Baths; Kitchens – When Are They OK?

Every week we get transactions involving illegal or unpermitted bedrooms, bathrooms, in-law units, cottages or kitchens (often part of an in-law or cottage). Illegal/unpermitted bedrooms are never an issue, as long as appraisers do not count them in the gross living area and give no value to them. Likewise, unpermitted bathrooms are usually treated similarly. […]Read More

Second Story Sliding Doors to Nowhere? Health/Safety Issues

One of our clients is buying a house with sliding doors on the second story that lead to nowhere (the planned deck was never completed). This is a great example of a “Health and Safety Issue” that will be called out by both FHA and Conventional appraisers. The solution is simply to make the doors […]Read More

What if an Appraisal Comes in High? Comes in Low???

We have had several FHA Purchases lately involving appraisals that came in way above purchase price. We have a $420,000 purchase, for example, with a $460,000 appraisal. When this happens, our borrowers often think they qualify for better financing, but they don’t. For value purposes, lenders always correlate to the Contract Purchase Price. Appraisals are […]Read More

Defense of Appraisers? Why They Have to Be Strict Sometimes

An appraiser we know received a threatening letter and a request for an explanation in regard to an appraisal report he prepared … FIVE years ago. The appraisal was for a $5 million+ home in Ruby Hills in Pleasanton, CA. The loan associated with that appraisal ended up getting paid off in a decidedly painful […]Read More

FHA Appraisals Are Public Record; New Compensation Rules

FHA APPRAISALS REVIEW HEALTH AND SAFETY In California and Texas, FHA property appraisers generally focus on potential problems for the occupant’s health and safety. The appraiser will do a simple examination of the home’s electrical system to make sure it’s working properly, and there won’t be any hazards for the homeowner. They will also inspect […]Read More

“Charming” the Appraiser to Get Value

We have a $915,000 FHA Purchase of a Duplex in Rockridge (Oakland). The appraisal was a huge concern because there are few comparable sales to “bracket” the upper end of that market. The buyer’s agent, however, met the appraiser at the property and pretty much charmed the daylights out of her, doing everything short of […]Read More

Be Nice to/Prepare for Appraiser

Agents, please see the comment below from one our best and most seasoned appraisers: “Real Estate Agents who don’t understand this will have appraisal issues far more often than an agent who does understand this: Agents or a homeowner being friendly, helpful, and accommodating to the appraisers makes a HUGE difference. When I see a […]Read More

HVCC Appraisal Rules Going Away; Alternative Slightly Better

We received an appraisal today of a house in one of Lafayette’s more desirable neighborhoods (Burton Valley). It came in $200,000 below value. The reason is that the appraiser did not use a single closed comparable sale from within the same immediate neighborhood (Burton Valley). All six comps were either outside the neighborhood, or active […]Read More

Financial Reform Bill to Eliminate HVCC Appraisals

The Recently Signed Financial Reform Bill should eliminate HVCC Appraisal guidelines. As always, the future is a bit murky until we hear how lenders and investors will ultimately interpret the language of the bill. But, it looks like that within the next 60 to 90 days, we will again be able to employ competent appraisers […]Read More

“Price Per Square Foot” Issues

The Price Per Square Foot Myth: We have a client with a 2,600 square foot house listed for $1.1 Million. It has been listed pretty much forever and is not selling. The owner insists it is worth “$425 Per Square Foot” because “all the other houses in the area are selling for that or more”. […]Read More

Appraisal Horror Story

Appraisal Horror Story We have a $285,000 purchase in an especially depressed area. We thought there would be no issue with the appraisal because the most recent comp was a “model match” that sold for $315,000, and it was clearly in inferior condition. We under-estimated the appraiser’s laziness, and he came in $20,000 LOW. The […]Read More

“Coaching” the Appraiser Works (if done respectfully)

We have had good luck “coaching appraisers” lately. BUT, the coaching has to be very respectful and professional, with the offering of pertinent information and data. Derision and blatant requests for a specific number get us nowhere. Remember, generally speaking, an appraiser needs comps that closed within 90 days of the inspection date; that are […]Read More

FHA Appraisal Story – Happy Ending

FHA Appraisal Story: We have an FHA purchase in Crockett and about half the house is under construction. Our FHA Appraiser disclosed everything, but he only gave value to the finished portion of the home, and disclosed the unfinished portions in a way that would not alarm the lender. The result: The appraisal slid right […]Read More

HVCC Appraisal Horror Story; FHA Not Slower

Consumer Confidence is up; New Home Sales are up; and Durable Goods Orders are up. Normally all this “good news” would send the stock market up too, and the bond market down – resulting in higher rates. The stock market, however, was unimpressed because New Home Sales and Durable Goods Orders are only up month […]Read More

A Scenario Where FHA Offers are Superior to Conventional Offers

When to accept the FHA Offer? A Realtor/Client called yesterday to discuss multiple offers she received in the $650,000 range for a $625,000 listing. Several offers involved conventional financing, and several involved FHA financing. Her concern was the appraisal; there were only one or two comparable sales that bracketed the $650,000 price while the majority […]Read More

Much Economic “News” coming this week; Commercial Hard Money

We have access to a Commercial “Hard Money” fund that is managed by a commercial real estate appraiser. The advantages of having a commercial appraiser manage the fund are several. First, the value can be estimated much more quickly, resulting in faster answers. Second, there are no up-front commercial appraisal fees that make commercial financing […]Read More