Kenneth R. Harney
WASHINGTON — How do you fight back when an appraiser — often from another city working for a low fee on behalf of a big bank — wrecks your sale, purchase or refinancing with a lowball valuation?
It’s a serious problem in markets across the country. For example:
– Homebuilder John Nolde of Richmond, Va., recently sold a new, green-certified house for $199,500, only to see an out-of-area appraiser cut the value to $169,000, a figure below Nolde’s own combined construction and land costs.
– Southern Methodist University business school professor William Maxwell had his four-bedroom Dallas home appraised at $790,000 for a refinancing last year, but when he went to sell it earlier this year, the appraisal came in at $730,000. Maxwell said the appraiser, who was not from the immediate area, “had never walked into a single house in this neighborhood,” and knew little about local pricing trends. He pulled his house off the market.
– Gary Crabtree, an appraiser in Bakersfield, Calif., sought to sell his mother’s condo this summer for $155,000 — a price he says was supported by extensive documentation of recent comparable sales. Within two days he got a full-price offer, but an appraiser assigned by the bank valued the condo at $147,000. When his buyer switched to a second lender, Crabtree says the assigned appraiser “came from 126 miles away.” Since Crabtree knew the appraiser was “geographically incompetent,” he “spoon-fed” the second appraiser the original comparables. Voila! The valuation came in at the full $155,000 listed price and the sale closed in mid-October.
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