I had a deal in place to sell a home for an agreed upon price. The purchase agreement was signed and the house had passed the home inspection with flying colors. However, the appraisal came in at $17000 below the selling price. The appraiser spent all of 10minutes at the house. He estimated the value of a spare buildable lot at $400. He miscalculated a built-in porch area as not part of the living space. And he comped the house against an older house in another town. The deal was killed. It cost us $157,000. And now we may need to go thru a realtor which will cut our profit another $10,000. What can we do to make that appraiser accountable for this?
2007-11-04 15:04:49 · 8 answers · asked by anyonebutkc 2 in Business & Finance ➔ Renting & Real Estate
1) Sueing appraisers just because he/she values your home less than selling price, would make appraisers jobs pointless.
2) Some companies are willing to consider a 2nd appraisal.
3) Appraisers are audited by the local government, and all should not deviate from 5% (up or down) from other appraisers.(there is a guideline to these things)
4) Porch areas are not considered to be part of the living space. Livable space is air conditioning/heating, flooring, baseboards, et cetera. Even when a porch is enclosed and has all these components, it is still sometimes not considered to be a bedroom or anything because of it's location within the house(example: if it's turned into a bedroom, but have to walk through a kitchen to get through to the bathroom, this is not a normal facilitating bedroom).
5) Lots are fairly simple and based on comparable land in your area. If other pieces of land sell for that much, you won't get more.
6) An appraiser is supposed to use the MOST comparable houses. This includes the closest homes that are comparable to your home. If you live in a rural area, they might have to go further to find a house that is nearly the same as yours. There are generally accepted guidelines for the distance of comparables. It's usually 1 mile for urban, 3 miles for suburbs, and 10 miles for rural areas. Occasionally, they have to go further if there isn't any comps closer.
---Basically, you have to give objective evidence of them doing something wrong, in order to dispute it.
If you feel they truly did it wrong, you could consider having another appraiser review it, or just dispute it with the Buyer and Finance Company.
2007-11-04 15:25:19 · answer #1 · answered by Nep 6 · 2⤊ 0⤋
I would have to say that first off, you usually cannot count a built in porch as living area, because, well, it's a porch. However, at the time of the appraisal, if you disagreed with it, you could have/should have questioned it then, and you could have had another appraisal done. Might have cost you 300-500, but also might have saved the deal. Going through a Realtor that knows the market could've told you that at the time and saved you all this trouble. That's what they get paid for-to guide you through the process.
As for legal recourse, you need to remember that an appraisal is an opinion of value, not an exact science. Having said that, there are "rules" an appraisal should follow, such as distance between subject and comparables, and I'm not sure that was followed. You might have a complaint but I would hate to suggest how far you might go with it.
Good luck.
2007-11-04 15:19:44 · answer #2 · answered by Carie T 1 · 1⤊ 0⤋
You lost $157,000? Actually lost this amount? Do you mean you didn't sell the house for this amount? But the house is still yours, so you lost a sale, not $157,000.
When the appraisal came in low, you had the right to hire another appraiser right away and, if the second guy appraised the property differently, you should have submitted the second appraisal contesting the first one.
If you had a Realtor in the first place, your Realtor would have taken care of this.
As for what to do now, if you can show ACTUAL loss you suffered and prove the appraiser made mistakes, you can take him to court. Be ready to show the judge your ACTUAL loss, not the emotions you have now.
I do not want to sound rude, just giving you the facts.
2007-11-04 15:36:11 · answer #3 · answered by REALTOR 3 · 2⤊ 0⤋
Doubtful you have any real legal recourse. You should discuss this with the company / bank that employs the appraiser. I'm surprised that when the appraisal came in below the value that the bank didn't appoint another appraiser to true up the deal.
It also isn't true that it "cost you" $157,000. It's money you didn't receive from the sale but you still have the asset and it will also be your choice to use a realtor (or not) as it was during the first go around.
2007-11-04 15:17:30 · answer #4 · answered by Anonymous · 2⤊ 0⤋
Unless you can show that the appraiser violated appraisal ethics and standards, you have no basis for lawsuit. Furthermore, I venture that this appraiser was hired by the lender and buyer. Hence, he has no obligation to YOU. He's working for someone else. Due to the foreclosure fiasco of recent times, appraisers are approaching valuations with a more conservative stance than in the past.
As far as the amount of time the appraiser spent viewing the property, that is normal. An appraiser doesn't need to stand around for an hour to observe what he is appraising. While I understand your disappointment with this outcome, it's not unusual.
2007-11-04 23:15:09 · answer #5 · answered by acermill 7 · 0⤊ 0⤋
Lots of issues here, but one simple answer. Appraisers are licensed and regulated by the state. If you believe (and have proof) that the appraiser acted in a careless or negligent manner and as a result cost you the sale of the property, you have recourse via the state. You can file a complaint and the state will investigate the complaint if it has merit.
2007-11-05 14:56:02 · answer #6 · answered by reggelv2 3 · 0⤊ 0⤋
Depends on whose appraiser it was. If it was yours, you can sue him for damages, but you will have to convince the court that what you say is true. Don't expect to recover the $ 157,000, which I presume was the contract price. You can sue for proximate damages, such as legal costs incurred on the aborted sale, and other costs you will have to pay again. You probably won't be able to recover the cost of using a realtor (I presume you didn't on the blown deal), since you would have to show that you are unable to sell it a second time without a realtor at the original contract price.
2007-11-04 15:45:22 · answer #7 · answered by cattbarf 7 · 1⤊ 1⤋
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2016-10-15 01:57:55 · answer #8 · answered by Erika 3 · 0⤊ 0⤋