Mary Thompson

HAPPY 60th BIRTHDAY BUFORD DAM ON MONDAY 3/1/10. CHECK OUT THIS VIDEO  FROM HAROLD MARTIN, ALSO A GREAT FRIEND OF OURS, WHO TOOK MOVIES OF THE DAM BEING BUILT, AN OLD BOAT HE BUILT IN THE 50'S  AND HIS FAMILY SKIING BEHIND THIS BOAT ALMOST 60 YEARS AGO!

WHERE DOES THE TIME GO, SURE BRINGS BACK GREAT MEMORIES FOR THOSE WHO WERE AROUND BACK THEN, WHICH ARE FEW! I WAS ONLY A GLEAM IN MY FATHER'S EYE IN 1950!

Okay here is your Thanksgiving Gift early.  Here is what you need to do to successfully appeal an appraisal.

First I must say not ALL appraisals are flawed and not all appraisers are incompetent like so many seem to think these days....but there are many appraisers who do not belong in the areas where they are appraising and there are many who just did not learn the proper way to appraise.

So here goes, pass this along to everyone you know, feel free to repost this blog, it will help!

1. Get a copy of the appraisal first. The borrower is by law supposed to get a copy before closing.

Review the top part of the form where the address is make sure that the address, borrower name and most importantly the legal description of the property is accurate. If they can't get these right, chances are the rest of the appraisal has issues!

2. Go over that same page and review the description of the property. Do they have this all correct. Is the bedroom and bath count accurate (REMEMBER appraisers separate the terrace or basement level rooms and square footage from the upper finished levels, so the bed and bath count will only be those rooms on the main and upper levels (above grade) but credit is given for basement area and finished rooms in the basement just at a different value per square foot.)

If they have missed important amenities or basic information like is the home on septic or sewer, etc. Chances are there are more errors to follow.

3. NOW here is the really important part:Look at the page where the comparables are noted and where the actual adjustments are made. If you see across the board adjustments for something like condition or quality of construction:+$10,000 or -$10,000 for example and the description is they are average in quality and the subject is above average, chances are there is a problem here. How can every sale that is defined as average compared to the subject's above average quality be exactly $10,000 inferior in value to the subject. This applies to condition and most definitely to SITE VALUES....watch out for those adjustments.

We appraise Lake front property and when I see an across the board adjustment of say $20,000 for above average lake lots as compared to average lake lots, this is impossible as no 2 lake lots are alike here and they certainly are not exactly $20,000 difference in overall value.

Site values are very important as you well know in many areas you can go just a few blocks over and while the house may be very similar to the subject property, maybe the lots on this block are worth far less than the subject site. So if you see that there are NO adjustments across the board for site values that are similar in SIZE only and you Know that these lots are NOT similar in value then you have cause to rebut this flawed appraisal

4. ANOTHER very important thing...LOOK at the comparable photos used in the appraisal report...ARE they the exact same ones that you see on your local FMLS or MLS?   If they are you hit the jack pot, why? Because that tells me that the appraiser did NOT drive by the comps and take their own photos. This happens more than I care to admit but it is very important for you to know because USPAP (our uniform standards of professional appraisal practice) REQUIRES that appraisers drive by the comps! So you have a clear violation of USPAP here and when a LENDER hears this....Bingo you get another appraisal done because how in the world can they assess the home and more importantly the neighborhood in which these comps are located if they did not drive by the property!

5. When appraisers make dollar adjustments there are only 2 kinds.....Positive and Negative. So if you see a PLUS sign in front of the adjustment that means that the comparable sale is INFERIOR to the subject and we add to that sale price to raise it up to the subject. If you see a MINUS in front of an adjustment that mean the comparable sale is SUPERIOR to the subject and therefore we are subtracting from the sales price of that comp. Just remember that we always adjust the comparable sales price against the subject. Another way I like to remember this is CBS and CIA (Comparable better subtract, Comparable inferior... ADD) CHECK THEIR ADJUSTMENT TO SEE IF THEY MAKE SENSE, MANY TIMES AN APPRAISER MAY USE THE WRONG ADJUSTMENT FACTOR PLACING A NEGATIVE ADJUSTMENT WHEN IT SHOULD BE POSITIVE AND VICE VERSA. THIS AFFECTS THE BOTTOM LINE APPRAISED VALUE!!!!!

6. Toward the bottom of the comparable page there is a section where the appraiser must note past sales history of the subject and the comparable sales....Check these dates and make sure they are accurate.

Again, the whole premise is this....The more small and/or large errors you find, the less accurate that appraisal really is....and it does not take long to find such errors, even if you don't know how much the adjustment should be. Remember adjustments are not based upon DOLLAR for DOLLAR costs, it is based upon what the market will pay for the variance...so it could be half the cost, it just depends.....on many factors.

I reviewed an appraisal where they "cloned" another appraisal report of a home that was close to the property that they were appraising. Appraisers do this to save time and that is fine except what I found was that they did not remove those items that did not relate to the subject and so they had the description for the subject all wrong and they also had the addresses of the comps wrong.  They were using the addresses of the old cloned report but using the actual data of the comp that they were using for the subject! 

7. Drive by the comps used, make sure the addresses are correct, make sure that the PHOTO used in the report MATCH the home.....I have seen wrong photos in the reports, they did not match the actual homes!

8. Check the comps and map that is included which shows where the comps are located. Just below the address on the comps page there is a section that asks how FAR the comps are from the subject. Double check this number. Many times the appraiser will reduce that mileage by quite a bit so that it passes underwriting......I have seen some comps show they are only 2-3 miles from the subject when in reality they are 10 miles from the subject!!!  Not good.

9. Check the sketch page where they draw the house.....make sure it looks right as far as placement of the rooms and the overall square footage. If they are off 100 feet or so this makes a difference on the appraised value of the home.

So you get the IDEA here......If you start adding up errors, you have the right to tell the lender the appraisal is flawed and this is without even dealing with whether or not the COMPS are good. That is a whole story in and of itself. If you know for a fact that the comps are bad, state why in your rebuttal!

10. Don't get mad about the whole process, just find the errors, state the facts and move forward...Tell the lender it is their responsibilty to use an appraiser who is familar with the area and who can put together an accurate report.

This will NOT always mean the value will be different but you have the chance to get an accurate appraisal on the home and then you will know for sure what it is really worth!

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If you work in the North Georgia area, we offer appraisal reviews. We have been very successful in getting lenders to order another appraisal or a review of the first one after they have seen my reviews!

Mary Thompson

www.marytappraisals.com

No I am not talking about walking around with blinders on while appraising. I am talking about appraising with NO numbers given to the appraiser ahead of time, no estimates of value, no loan amount, NOTHING!

Forever, Appraisers have been given numbers to HIT so to speak, when they were given the appraisal assignment by the Banks, Brokers, Realtors, Sellers, Buyers. Now due to HVCC this is not allowed!

So what does that mean for the Appraiser? Well it means that they are left to their own devices and abilities to chose the right comparable properties and how to accurately analyze the market and make the appropriate adjustments to the "comps" to reflect their variances when compared against the Subject property ( The one they are appraising).

Unfortunately, so many appraisers were used to just appraising TO the given number or BACKING into that number rather than truly evaluating the market and moving forward to the real estimate of value for the subject property. So if the appraiser is not experienced in what I define as BLIND appraising, they may fumble around trying to come up with the true and accurate market value for that property.

The appraiser must know the area in which they appraise. They must know LAND values intimately and they must know what the market is paying currently for all sorts of items that we review, ie: upgrades to the home, bed and bath count, finished vs. unfinished basements, other amenities such as pools, fences, etc. For too long there were numbers appraisers always used to make adjustments for these items,  but chances are unless they have analyzed the current market and their reaction to these amenities, these old adjustments are just that....OLD and outdated.

So if you find an appraiser who can truly BLIND appraise, you have found a GOOD one! They do not NEED that number ahead of time!

I love BLIND appraising! I don't want to know what someone thinks their home is worth, that is MY job to provide them with this information and to provide the BANKS with this vital information to protect their RISKS. It is my job not to MISS anything during my inspection process and to talk to Realtors, Buyers, Sellers, Builders, etc. about what is going on in the market today.

Stay tuned....I plan to advise everyone on what to look for in an appraisal that will tell you right off the bat if it is FLAWED and therefore will allow you to request another appraisal or a review of the current one! It could save a deal of yours!

Mary Thompson

Certified/FHA Approved

www.marytappraisals.com

Is it okay? Can I toot my own horn please???

Last October I was interveiwed by The Weather Channel due to our severe drought and how that would impact Real Estate Values. It was not a pretty picture as we were 18 feet below full pool at that time.

I contacted The Weather Channel last week when we hit full pool to tell them the good news (we rose 18 feet in one year) and that they should do another story about Lake Lanier hitting full pool and what good news that is for all concerned. Well, they contacted me and today at Aqualand they are conducting an interview with myself and Len Jernigan of Aqualand Marina , to talk about Real Estate now and Business now with the lake being full. Should be a much happier story!

The only bad news is the average Lake Home Sales price declined 25% from 7/08 - 10/08 as compared to the same time this year. But the GOOD news is that we have seen 2 times, yes double the number of sales in this same period on Lake Lanier and we have 19 homes pending, of which 30% went under contract in October and 80% went under contract in the months of September and October combined.

I plan to tell them that we have 3 things in our favor, dock permits being gone by the end of October, water levelsabove full pool and the market seems to be stabilizing.

I also plan to tell them that Lake Levels seem to be tied to the DOW interestingly enough, whether that little tidbit will make the cut, who knows!

So I will let you know how it all turned out and when they plan to air the show.

Have a great day everyone. Remember if you need a current value on your Lake Lanier home you know who to call.

Mary Thompson