Lazy appraisers can cause problems with home purchase or refinance.

Today's blog is just a rant so feel free to skip it.  We are in the process of buying a home with a VA loan.  We were scheduled to close this coming Friday.  Then the appraisal threw a wrench in the works.  I am not too upset by the repairs required except that repairing siding is cosmetic and removing the remnants of a pumphouse is something we would have done eventually but to require it to be done before closing is ridiculous because it doesn't affect the structure.

Here is where my rant comes in.  The house we are buying is almost 3200 sq feet on a 20,000 square ft lot.  Other houses of similar size on smaller lots are selling around 275,000.  We know this because we looked at those houses.  The city assessed the house at 252,000.  Cities usually assess low.  We were purchasing the property at 245,000.  The appraisal came in at 241,000.  Everyone involved is quite puzzled at this value.  The appraisers excuse was that there were no comparable properties in the area because the house we are purchasing is larger than any other in the neighborhood.  There were houses in the subdivision smaller in building and lot size that sold for 250,000 in the last 6 months.  The houses that were used in comparison were half the lot size and no where near the neighborhood.

He took a 280,000 house and knocked of money for a different neighborhood, fencing, appliances added money for other things and then took off 9,500 for the house not conforming to the neighborhood.  I would understand if the house were smaller in size but it is not it is the largest on the street.   The house sold for 235,000 just three years ago which means that the house has only gained less than 3% value in 4 years when house values in the are average at least 2% raise per year.  All because the appraiser didn't look at city assessment or in homes sold less than a mile away and basing value on the average price per square foot.

Bottom line we are in danger of losing the house.  The sellers were at the break even point at the 245,000 price.  With the additional repairs and a lowered sale price to fit the appraisal they are looking at having to pay money to get out of the house.  Money they don't have.  We agreed to paying for all the materials if the current homeowners could do the work.  The sellers are saying that unless the commission for the two agents go down half a percent each that they are unable to complete the transaction.  We have two weeks left on the 60 day notice we give on our current residence and we had to jump through some hoops to get our daughters enrolled in school where they are currently.  If this purchase doesn't come through we are up a creek without a paddle.

Moral to the tale when getting an appraisal get referrals from friends who recently got a good appraisal don't just use the mortgage companies person.