Tweet
Second mortgage appraisals. These are very quickly becoming the bane of my existence. Of course, the approval of this type of loan is dependent on the appraisal, so it can be a make or break number for the deal.
THIS special snowflake says his house is worth 160K. County says his house is worth 119k. Of course, county and market can be well off from each other, but a big difference can be a warning sign. So, appraisal comes back... at 123k.
NOOOOO! This is NOT what his house is worth. He knows a real estate agent and they say there is NO WAY this is what his house is worth. (In my world, saying you know a real estate agent is kinda the equivalent to saying you're best friends with a lawyer. The SC thinks it means something, while I shrug.)
Standard "I don't like my appraisal results" procedure enacted. I send him a copy of the report and let him know that I can put in a dispute of the appraisal, but I need it to be in his words, with exact reasons why he disagrees. He e-mails me his dispute... in ALL CAPS. I take a quick glance. At least he didn't quote Zillow, that's a plus. Lists a few houses that sold in the 140k to 150k range. Points out an extra bedroom and a deck. Those could be worthy features, if the appraiser truly missed them. Okay then, I copy/paste it into the dispute window and wait for the results.
New appraisal result: Oops, they did miss the deck. $125k then. As for the rest: that extra bedroom: no can do. It's a room, sure, and it was included in the room count, but it cannot be counted as a functional bedroom when its only egress is via another bedroom. Plus, it has no closet. As for those houses that sold for 140-150k... they aren't in your neighborhood. THEIR neighborhood has a market history of 140 to 170k. YOUR neighborhood averages 118k. In fact the one house from your neighborhood that you did list, that one that sold for 146k, is the single highest sale in your neighborhood, and that was almost 2 years ago. Since then, multiple properties have sold for, guess what, 115 to 120k. That 125k value is HIGH.
NOOOOO! He e-mails me again in all caps. His real estate agent says...
Let me just stop reading there. Real estate agents look at the projected market as they see it. Very good for trying to sell your house, I'm sure. After all, you want to get the most you can, and the hope is for the market to be moving upwards. Of course, if the agent is wrong, your house just doesn't sell, and you have to lower the price. LENDERS however, look at the recent history. Your house ain't worth 150k until it, or an equivalent, actually SELLS that high. If people are buying at 120k, (and even then it's taking 9 months to sell) then that's what we look at.
So, Mr Friends-with-a-real-estate-agent cancels the application. He'll get HIS money somewhere else. k.
Lucky for him, he's not out anything but time. We do pass on the charge for our appraisals, but ONLY if you get the loan. Canceled loans we write off as a cost of doing business.
Two weeks later, he's back.
Sure, I can un-cancel the application. New appraisal? Sure! I can even use an alternate company. A bit more expensive, though, and with reason to believe it won't come back as you like, I get to by-pass our normal procedure and charge you for it upfront.
Oh, you're canceling again. k.
Two DAYS later, he's back again. Going to just get what he can get using the appraisal we already did. (Oh! Oh! Oh! Let's tell you the difference! HE wants $115k. We max out at 85% of the value of the home, so we can only do $106,250. Actually, I might be able to get the full amount approved, but the risk would go up, so the rate would go up, so he doesn't want that. Poor, deprived baby.) Well, I can still use that appraisal. Can make everything ready to close very quickly at this point.
Only NOW he wants the appraisal fee waived. Under the argument that he didn't agree with it. Also if he canceled, we'd be out the money anyway.
Um. NO. You want the loan, you pay the cost. You don't want the loan, I'll happily wave goodbye a third time.
Oh, I see! You thought I'd go chasing after you when you canceled before, didn't you?
You think I care if you get this loan, don't you? 
You are so very cute.
You see, I KNOW why you came back. Because we have one of the easiest home equity loan programs in the state, especially for someone pushing the value boundaries like you are. AND anyone else is going to charge that appraisal fee upfront once they see that county value and compare it to what you want. Frankly, I got more home equity loans, even in the middle of winter, than I know what to do with. Yeah, 100k is a higher balance than many, but while you've been wavering back and forth, we've done more than ten times that amount in home equity loans.
So, get the loan, fees intact, or don't. Just stop wasting my time.
THIS special snowflake says his house is worth 160K. County says his house is worth 119k. Of course, county and market can be well off from each other, but a big difference can be a warning sign. So, appraisal comes back... at 123k.
NOOOOO! This is NOT what his house is worth. He knows a real estate agent and they say there is NO WAY this is what his house is worth. (In my world, saying you know a real estate agent is kinda the equivalent to saying you're best friends with a lawyer. The SC thinks it means something, while I shrug.)
Standard "I don't like my appraisal results" procedure enacted. I send him a copy of the report and let him know that I can put in a dispute of the appraisal, but I need it to be in his words, with exact reasons why he disagrees. He e-mails me his dispute... in ALL CAPS. I take a quick glance. At least he didn't quote Zillow, that's a plus. Lists a few houses that sold in the 140k to 150k range. Points out an extra bedroom and a deck. Those could be worthy features, if the appraiser truly missed them. Okay then, I copy/paste it into the dispute window and wait for the results.
New appraisal result: Oops, they did miss the deck. $125k then. As for the rest: that extra bedroom: no can do. It's a room, sure, and it was included in the room count, but it cannot be counted as a functional bedroom when its only egress is via another bedroom. Plus, it has no closet. As for those houses that sold for 140-150k... they aren't in your neighborhood. THEIR neighborhood has a market history of 140 to 170k. YOUR neighborhood averages 118k. In fact the one house from your neighborhood that you did list, that one that sold for 146k, is the single highest sale in your neighborhood, and that was almost 2 years ago. Since then, multiple properties have sold for, guess what, 115 to 120k. That 125k value is HIGH.
NOOOOO! He e-mails me again in all caps. His real estate agent says...
Let me just stop reading there. Real estate agents look at the projected market as they see it. Very good for trying to sell your house, I'm sure. After all, you want to get the most you can, and the hope is for the market to be moving upwards. Of course, if the agent is wrong, your house just doesn't sell, and you have to lower the price. LENDERS however, look at the recent history. Your house ain't worth 150k until it, or an equivalent, actually SELLS that high. If people are buying at 120k, (and even then it's taking 9 months to sell) then that's what we look at.
So, Mr Friends-with-a-real-estate-agent cancels the application. He'll get HIS money somewhere else. k.
Lucky for him, he's not out anything but time. We do pass on the charge for our appraisals, but ONLY if you get the loan. Canceled loans we write off as a cost of doing business.Two weeks later, he's back.
Sure, I can un-cancel the application. New appraisal? Sure! I can even use an alternate company. A bit more expensive, though, and with reason to believe it won't come back as you like, I get to by-pass our normal procedure and charge you for it upfront.
Oh, you're canceling again. k.
Two DAYS later, he's back again. Going to just get what he can get using the appraisal we already did. (Oh! Oh! Oh! Let's tell you the difference! HE wants $115k. We max out at 85% of the value of the home, so we can only do $106,250. Actually, I might be able to get the full amount approved, but the risk would go up, so the rate would go up, so he doesn't want that. Poor, deprived baby.) Well, I can still use that appraisal. Can make everything ready to close very quickly at this point.
Only NOW he wants the appraisal fee waived. Under the argument that he didn't agree with it. Also if he canceled, we'd be out the money anyway.
Um. NO. You want the loan, you pay the cost. You don't want the loan, I'll happily wave goodbye a third time.
Oh, I see! You thought I'd go chasing after you when you canceled before, didn't you?
You think I care if you get this loan, don't you? You are so very cute.You see, I KNOW why you came back. Because we have one of the easiest home equity loan programs in the state, especially for someone pushing the value boundaries like you are. AND anyone else is going to charge that appraisal fee upfront once they see that county value and compare it to what you want. Frankly, I got more home equity loans, even in the middle of winter, than I know what to do with. Yeah, 100k is a higher balance than many, but while you've been wavering back and forth, we've done more than ten times that amount in home equity loans.
So, get the loan, fees intact, or don't. Just stop wasting my time.
Dang.
I do think it's amusing that when you convert CAD to USD, my condo is worth almost exactly the same amount as this guys house... 
Comment