Appraisal Review

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Real Estate Agent

I just reviewed an appraisal from two years ago, at the request of the bank.  What I found were inconsistencies, inadequate or non-confirmed information.  The interesting part was that within the debt service ratio where the bank reviews the expenses, the appraiser stated "free from the city" for the water service!  While it is a little "oops" that "oops" runs the owner $80/month and that figure wasn't calculated into the expense portion for the qualification of the property.  At no time in this report, did the appraiser state that the rents for the building were under market rent due to the size, condition and/or location.  Yet, while that might not play on something, the owners didn't know that they were getting below market rents for 1,900 square feet in prime Chicago neighborhood!  In fact the rents were 50% of what they should have been. 

So what does this have to do with anything?  When you are the listing agent and the valuation may come in low , the buyer has the right to see the appraisal as they have paid for it.  You have one chance to appeal that value.  Carefully review the information as there may be "oops" and an underwriter in tim-buck-two in another state may not know this information. 

 

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This information is provided to you by Barb Van Stensel with a commitment to support the Chicago, IL community.

 

 

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Show All Comments
Rainmaker
353,982
Dale Terry
Yadkinville, NC

Good post, I bet there are plenty of "oops' in files everywhere.  Underwriters were paid to overlook things in order to beat the street.  Just another fact that  shows the greed of banks and those who didn't do their job.  Stay on target, we need more to combat the negativity surrounding real estate.

August 14, 2008 03:56 PM #1
Rainer
1,605
Sean Reid
Capital Financial - Bellevue, WA

Great Article!!!

August 14, 2008 04:22 PM #2
Rainmaker
286,717
Barb Van Stensel
Chicago, IL

There are plenty of "oops" in these files and they should have passed underwriting or have had a second review as a result of the inconsistencies.

Sean:  Thank you.  I am the granddaughter,  daugher and sister to MAI's, SRA's with the appraisal institute and was trained under those guidelines as an appraiser, here in Chicago. 

August 14, 2008 04:37 PM #3
Rainer
10,835
Todd Crilley
NWIDreamHomes.com - Munster, IN

Apprasing is all about details, This is a good point made. I think that is one of the reasons USPAP has made it tougher to become an appraiser in 2008.

August 22, 2008 09:54 PM #4
Rainmaker
286,717
Barb Van Stensel
Chicago, IL

Todd, I am glad USAP made it tougher to get into but that still doesn't help at the State Level where in Illinois you can keep flunking the test up to 4 - 6 times, last time I heard, before you had to take the class over.  I hate it when the media dumps on the appraisers or dumps period because it is news and misses the oint of talking about news to force change.  Freedom of speech has taken a left hand turn someplace in time.

August 23, 2008 10:55 AM #5
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Rainmaker
286,717

Barb Van Stensel

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