In response to the complaint filed: In order to address all issues of the complaint filed, I’ve restated each individual issue verbatim, per the documentation provided, followed by my response. 1.
Roman'; font-stretch: normal;"> The appraiser states that our home is 3 bedrooms and 2 bathrooms. However, our home has 2.5 bathrooms with the extra bathroom in the basement. This information is gleaned from our county parcel number. The appraisal report lists the home as having a total of 3 bedrooms and 2.1 bathrooms. Due to UAD guidelines, a half bathroom is no longer indicated as 0.5. It is indicated as 0.1. So a home with two full bathrooms and one half bathroom would be listed as 2.1 not 2.5. In the appraisal, both the improvements section and the sales comparison grid show the total bathrooms as 2.0. This is due to the location of the half bathroom. The half bathroom is located on the lowest level, the garage level. This level, though above grade, was considered basement based on the functional utility of the level. Therefore, since the half bathroom is located on the “basement” level, it could not be added to the total bathroom count per Fannie Mae and Freddie Mac guidelines. It is included in sales comparison approach, in the basement field, formatted as 1rr0br0.1ba0o in the report. The 0.1ba represents the half bathroom. 2. The appraiser states that our home’s square footage is 1,640 square feet. However, according to our county parcel, we have exactly 2,000 square feet. The appraisal lists your home has having a GLA or gross living area of 1,640 square feet as the lower level was considered basement based on the functional utility of the level. If the lower lever were not considered basement, the total square footage of home would be 2,180 square feet and not the 2,000 square feet the county states. As stated in the appraisal report, the home was measured in person and varies from the public records. The square footage listed with the county often varies from the square footage listed in an appraisal. This can be due to a number of reasons. The guidelines for calculating the square footage vary between the county inspectors and the appraisers. Additionally, the county may have used building plans in calculating the square footage while the appraiser measures the existing structure. 3. The appraiser checked the box that we have a full basement yet did not count the, as he states in his appraisal, 540 square foot basement area that includes a full walkout. a. The appraiser makes the claim that the basement is “below grade” but the basement is built on a slab with immediate yard access and is not built underground as non-townhomes tend to be built. As stated above, the lower level was considered basement and was adjusted for in the sales comparison grid. The basement was listed at 540 square feet with 540 square feet of finished space and is listed with a walk out. It was conveyed in the sales comparison grid, in the basement section, formatted as 540sf540sfwo per UAD guidelines. The appraiser specifically stated in the report that the area valued as basement is located above grade and was adjusted as such due to the functional utility of the space. Typically this space is utilized similar to that of a basement as the finished space located on this level would share similarities to a finished basement, i.e. recreation room, theater room or additional bedrooms, etc.. The complaint even references this level as basement when referring to the location of the half bathroom. Many three story townhomes, though not the majority, do not feature finished space on this level. This can be quite confusing and difficult to convey in an appraisal report if the lower level were not viewed as a basement. Identical townhomes, one with a finished lower level and one without would then feature different square footage figures. One may ask after reading such an appraisal, how can identical homes built by the same builder, in the same neighborhood, not be the same size? The easiest way to work around this issue is to call this lower level basement. We can then adjust for amount of finished square footage on this level. Prior to the implementation of the UAD requirements placed upon appraisers, the practice of calling the lower level basement on three story townhomes was reserved only for the neighborhoods where this was observed on a regular basis. Since UAD has now standardized how we are to view homes, we can no longer use this practice in only select neighborhoods. If we are to use this practice, we must use it for all townhomes. There may not be any townhomes in the complainant’s neighborhood that feature an unfinished lower level but due to the UAD, if we use this practice, we must practice this for all three story townhomes. 4. The appraiser used comparable homes with less square footage, fewer rooms and fewer bedrooms, and inside townhome units as opposed to our outside unit with large yard. There was no concession given for our lot size being significantly larger than those in the comps used (.24 acres). The appraiser also disregarded a similar home to our having sold recently for $210,000. a. In addition, the appraiser used a home almost a mile away from our home when the home that recently sold for $210,000 was not used as a comparable home. Comparable sales with less square footage, fewer rooms, fewer bedrooms were used in the report. Interior unit townhomes were used in the report. These sales were used as they appeared to be the best available at the time of inspection. Research revealed the subject’s neighborhood to be one of the highest selling neighborhoods within the general market area. As the subject’s neighborhood featured limited sales activity over the previous twelve months, it was necessary to use comparable sales located in the general market area, outside of the subject’s neighborhood. The highest selling townhomes, located in the general market area were used for this appraisal which was not the intent of the appraiser, but ultimately the outcome once analysis was completed. Additionally, the subject’s site was adjusted for in comparables 3, 5 and 6. More importantly though, the subject’s end unit location was adjusted for against the interior unit comparables. The complaint references using a home almost a mile away from our home. It was necessary to expand the search parameters to over one mile in order to find comparable sales that would match or bracket the GLA or square footage of the subject as research revealed no comparable sales matching or bracketing the higher end of the subject’s GLA or square footage, located in the subject’s neighborhood or general market area. Research did reveal homes located within the subject’s general market area matching or bracketing the subject’s GLA or square footage. These sales were not used as they did not appear to be a good reflection of the subject’s market appeal as they had sold much lower than where the subject’s neighborhood has typically sold at. The complaint references a similar home that had sold recently for $210,000 but gives no address of this sale. Research revealed no townhomes sales within the previous year, located within one mile of the subject, selling for exactly $210,000. Research did reveal a townhome sale, selling nearly a year ago, located 1.4 miles from the subject selling for $210,000. It is located in the same neighborhood as comparable 4 which sold for $211,000. 5. The appraiser stated that no upgrades have been done in the home in 15 years yet we had almost $50,000 put into the house before we moved in for new hardwood flooring, doors, windows, roof, siding, air conditioning unit, and other items of high value. The statement the complainant is referencing is in the condition field of the improvements section which states “C3;No updates in the prior 15 years;…” This statement is a UAD automated response statement added to the report when a certain box is checked in the report software referring to specific kitchen and bathroom updates. It is not indicative to the entire house. The UAD requires certain items to be addressed. Depending on how they are addressed, the UAD will add very specific lines of commentary to the report, this being one of them. The appraiser cannot change any of the automated responses the UAD implements. The updates and upgrades to the subject were taken into consideration during the selection of the comparable sales. The appraiser does admit the upgrades should have been listed specifically and individually in the report as all upgrades were accounted for in the research and analysis completed on the subject property. In response to the desired settlement, where the complainant states I have provided fraudulent services: As stated in the report, the appraised value for the subject appears to fall in line with the historic values for the subject’s neighborhood. Over the previous five years, the subject’s neighborhood had seven sales ranging from $169,000 to $222,000 with a median value of $195,000. The contract value for the subject falls outside the range of values for the subject’s neighborhood. If sold, it would be the highest sale in the neighborhood over the previous five years. The contract value does not appear supported by the current market as the highest sale in the neighborhood at $222,000 is a waterfront property with a boat dock while the subject is not waterfront and does not have a view of the water. With the next highest sale coming in at $202,000, it would appear potential buyers would be willing to pay at least $20,000 more for the waterfront homes as compared to the homes in the neighborhood that do not feature a waterfront location. Given this data in addition to the data listed in the sales comparison approach, it would appear the final opinion of value is supported in both the subject’s neighborhood and general market area. In summary, it appears a large number of the issues associated with the complaint appear to be due to a lack of experience in reading residential appraisal reports as a large number of the concerns were addressed within the report. As stated in the report, “The intended user of this appraisal report is the lender/client and HUD/FHA. No additional intended users are identified by the appraiser…”. As this report is not intended to be read by anyone other than the client or lender and FHA/HUD, it was written in a way to accommodate a reader versed in residential appraisal reports. Readers not familiar with UAD and FHA reporting requirements may have some difficulty in understanding all aspects of the appraisal report. If there are any additional concerns, my contact information is listed below. Thanks, [redacted] Certified Residential Appraiser 1303 Bull Finch Court Newark, DE 19702 Phone: (302) 750-9898
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that this does not resolve my complaint. For your reference, details of the offer I reviewed appear below.
I have detailed our rebuttal for each of the appraiser's responses to our original complaint below. We do not accept his response and continue to find errors in not only his appraisal but also in his professional judgment. We request a full review of his appraisal by a superior in the field and adjustments be made accordingly, as this is an FHA appraisal and his errors will cause this appraisal to stay attached to our property for six months, which is unacceptable. The link to the more appropriate comparable sales (and how we arrived at our asking/contract price) can be found here: [redacted]
Appraiser:
The appraisal report lists the home as having a total of 3 bedrooms and 2.1 bathrooms. Due to UAD guidelines, a half bathroom is no longer indicated as 0.5. It is indicated as 0.1. So a home with two full bathrooms and one half bathroom would be listed as 2.1 not 2.5. In the appraisal, both the improvements section and the sales comparison grid show the total bathrooms as 2.0. This is due to the location of the half bathroom. The half bathroom is located on the lowest level, the garage level. This level, though above grade, was considered basement based on the functional utility of the level. Therefore, since the half bathroom is located on the “basement” level, it could not be added to the total bathroom count per Fannie Mae and Freddie Mac guidelines. It is included in sales comparison approach, in the basement field, formatted as 1rr0br0.1ba0o in the report. The 0.1ba represents the half bathroom.
Our Response:
The "functional utility" of the lower level space is not equivalent to that of a basement, rather, it is a completely finished family room. Nothing about this level is typical to that of a basement. There is a full walk-out to the backyard, a half bathroom, pantry, carpeting and entertainment area. Per Fannie Mae and Freddie Mac guidelines, this square footage must be included to the total bathroom count. The functional utility of this room should prove our point of the errors made in this appraisal.
Appraiser:
The appraisal lists your home has having a GLA or gross living area of 1,640 square feet as the lower level was considered basement based on the functional utility of the level. If the lower lever were not considered basement, the total square footage of home would be 2,180 square feet and not the 2,000 square feet the county states. As stated in the appraisal report, the home was measured in person and varies from the public records. The square footage listed with the county often varies from the square footage listed in an appraisal. This can be due to a number of reasons. The guidelines for calculating the square footage vary between the county inspectors and the appraisers. Additionally, the county may have used building plans in calculating the square footage while the appraiser measures the existing structure.
Our Response:
The functional utility of the lower level is not equivalent to that of a basement; therefore, the total square footage should be the 2,180 square feet the appraiser states above.
Appraiser:
Comparable sales with less square footage, fewer rooms, fewer bedrooms were used in the report. Interior unit townhomes were used in the report. These sales were used as they appeared to be the best available at the time of inspection. Research revealed the subject’s neighborhood to be one of the highest selling neighborhoods within the general market area. As the subject’s neighborhood featured limited sales activity over the previous twelve months, it was necessary to use comparable sales located in the general market area, outside of the subject’s neighborhood. The highest selling townhomes, located in the general market area were used for this appraisal which was not the intent of the appraiser, but ultimately the outcome once analysis was completed. Additionally, the subject’s site was adjusted for in comparables 3, 5 and 6. More importantly though, the subject’s end unit location was adjusted for against the interior unit comparables. The complaint references using a home almost a mile away from our home. It was necessary to expand the search parameters to over one mile in order to find comparable sales that would match or bracket the GLA or square footage of the subject as research revealed no comparable sales matching or bracketing the higher end of the subject’s GLA or square footage, located in the subject’s neighborhood or general market area. Research did reveal homes located within the subject’s general market area matching or bracketing the subject’s GLA or square footage. These sales were not used as they did not appear to be a good reflection of the subject’s market appeal as they had sold much lower than where the subject’s neighborhood has typically sold at. The complaint references a similar home that had sold recently for $210,000 but gives no address of this sale. Research revealed no townhomes sales within the previous year, located within one mile of the subject, selling for exactly $210,000. Research did reveal a townhome sale, selling nearly a year ago, located 1.4 miles from the subject selling for $210,000. It is located in the same neighborhood as comparable 4 which sold for $211,000.
Our Response:
Many of the homes used in the comparable sales portion of the appraisal should not have been used in the first place. The appraiser admits that they were dissimilar in all aspects of the properties (room count, bathroom count, square footage, etc), and that "adjustments" had to be made. For this reason, the sales prices of these homes can not be used as comps as the market in which they sold is completely different than the market in which we are attempting to sell. As the appraiser admitted, we are located in the highest-priced neighborhood, yet he only used one comp from our neighborhood and instead chose homes in the surrounding, less desirable areas. The appraiser admitted that he had to go outside the typical one-mile radius for comps; however, when doing so, he specifically chose comps dissimilar to our property. There were many other possible comps that he overlooked that can be found here: http://matrixweb.trendmls.com/Matrix/Public/Portal.aspx?ID=1290562740.
In addition, not many homes sell on our street or the adjacent street of our neighborhood very often. If we were to extend the time frame in which comps can be used, you will notice the appraiser states "comparable home sold on the adjacent street for $222,000 five years ago." Appraiser states that previous high water mark for a waterfront property in this neighborhood was $222k five years ago. The market is in a much better state than it was five years ago. To compare the current market to that of five years ago, and to set a limit on the entire neighborhood based on that assumption, is an error in judgment on the appraiser's part. If we add a very modest 2% each year for inflation and appreciation, this particular comp would be able to sell for $245,000 in today's market, which is a very fair price. Even if we concede that this property is "superior" to our property, the appraiser said that "potential buyers would be willing to pay $20,000 more for waterfront properties." Based on this statement, our contract price of $225,000 falls right in line with the valuation of an appreciating market. For the appraiser to deduct $31,000 from our contract price, based on incomparable "comps" and putting a cap on the neighborhood based on a sale that was five years ago at the bottom of the real estate market, is inappropriate and flawed. If we were to look at [redacted], which settled back in October 2014 for $199,000 ($5,000 more than the price our appraiser put us at), you will see that this particular property is significantly inferior to our property. It is an interior unit with .06 acres, as opposed to our end-unit with .24 acres. To appraise our home at a lesser value than an interior unit with a significantly smaller lot, from two years ago, is yet another error in professional judgement. Again, assuming a modest 2% adjustment per year for inflation and appreciation, and the fact that our property is 4x the size, and that our property has had over 50k in upgrades and improvements in the past 7 years, our property can not and should not be appraised for less than this inferior property.
Appraiser:
The statement the complainant is referencing is in the condition field of the improvements section which states “C3;No updates in the prior 15 years;…” This statement is a UAD automated response statement added to the report when a certain box is checked in the report software referring to specific kitchen and bathroom updates. It is not indicative to the entire house. The UAD requires certain items to be addressed. Depending on how they are addressed, the UAD will add very specific lines of commentary to the report, this being one of them. The appraiser cannot change any of the automated responses the UAD implements. The updates and upgrades to the subject were taken into consideration during the selection of the comparable sales. The appraiser does admit the upgrades should have been listed specifically and individually in the report as all upgrades were accounted for in the research and analysis completed on the subject property.
Our Response:
The important thing to remember about this property is that over $50,000.00 in upgrades and improvements have been done within the past 7 years. The appraiser stated that the roof looked to have "at least 2 years of life left" on his original appraisal; however, the roof was replaced 7 years ago with 30 year architectural shingles. For the appraiser to blatantly state that the roof was anything but improved/upgraded, is a major flaw in the appraisal. In addition to the new roof, there is also new siding, new windows, new exterior Anderson doors on all three levels, new hardwood flooring, new upgraded carpeting, new HVAC, new 80 gallon water heater and a new fence. When we purchased this home in 2009, these upgrades and improvements were adjusted and accounted for within the appraisal, yet Mr. [redacted] denies us any credit for these upgrades and the comps used didn't have these upgrades, either. No concessions were given. Even given an annual 8% depreciation on the upgrades and improvements on the home, after 7 years we should still receive upwards of $28,000 in credit for these items, as they would allow the new buyers to purchase an upgraded and move-in ready home.
Another blatant error is that he specifically noted that our property did NOT have a fence. However, numerous pictures on his own appraisal report show our newer fence. When material facts like this are blatantly omitted it calls into question the entire appraisal report and the professionalism of the appraiser. To miss such an obvious aspect of the house means that all other facts on this appraisal report are questionable.
In summary, it appears that our complaint is not a lack of experience in reading appraisals; rather, it is a compilation of numerous errors in material facts as errors in Mr. [redacted]'s professional judgement. When an entire sale is dependent on the opinion and judgement of one person, it is paramount that their skills and judgement be nothing short of impeccable. The facts that we have laid out clearly call into question the ability and judgement of Mr. [redacted]. Furthermore, since this is an FHA appraisal, this now sticks with our property for 6 months, which prevents us from selling our home to a potential FHA buyer who agreed that our home was priced appropriately when all factors were taken into consideration.
Regards,
[redacted]
In response to the complaint filed: In order to address all issues of the complaint filed, I’ve restated each individual issue verbatim, per the documentation provided, followed by my response. 1.
Roman'; font-stretch: normal;"> The appraiser states that our home is 3 bedrooms and 2 bathrooms. However, our home has 2.5 bathrooms with the extra bathroom in the basement. This information is gleaned from our county parcel number. The appraisal report lists the home as having a total of 3 bedrooms and 2.1 bathrooms. Due to UAD guidelines, a half bathroom is no longer indicated as 0.5. It is indicated as 0.1. So a home with two full bathrooms and one half bathroom would be listed as 2.1 not 2.5. In the appraisal, both the improvements section and the sales comparison grid show the total bathrooms as 2.0. This is due to the location of the half bathroom. The half bathroom is located on the lowest level, the garage level. This level, though above grade, was considered basement based on the functional utility of the level. Therefore, since the half bathroom is located on the “basement” level, it could not be added to the total bathroom count per Fannie Mae and Freddie Mac guidelines. It is included in sales comparison approach, in the basement field, formatted as 1rr0br0.1ba0o in the report. The 0.1ba represents the half bathroom. 2. The appraiser states that our home’s square footage is 1,640 square feet. However, according to our county parcel, we have exactly 2,000 square feet. The appraisal lists your home has having a GLA or gross living area of 1,640 square feet as the lower level was considered basement based on the functional utility of the level. If the lower lever were not considered basement, the total square footage of home would be 2,180 square feet and not the 2,000 square feet the county states. As stated in the appraisal report, the home was measured in person and varies from the public records. The square footage listed with the county often varies from the square footage listed in an appraisal. This can be due to a number of reasons. The guidelines for calculating the square footage vary between the county inspectors and the appraisers. Additionally, the county may have used building plans in calculating the square footage while the appraiser measures the existing structure. 3. The appraiser checked the box that we have a full basement yet did not count the, as he states in his appraisal, 540 square foot basement area that includes a full walkout. a. The appraiser makes the claim that the basement is “below grade” but the basement is built on a slab with immediate yard access and is not built underground as non-townhomes tend to be built. As stated above, the lower level was considered basement and was adjusted for in the sales comparison grid. The basement was listed at 540 square feet with 540 square feet of finished space and is listed with a walk out. It was conveyed in the sales comparison grid, in the basement section, formatted as 540sf540sfwo per UAD guidelines. The appraiser specifically stated in the report that the area valued as basement is located above grade and was adjusted as such due to the functional utility of the space. Typically this space is utilized similar to that of a basement as the finished space located on this level would share similarities to a finished basement, i.e. recreation room, theater room or additional bedrooms, etc.. The complaint even references this level as basement when referring to the location of the half bathroom. Many three story townhomes, though not the majority, do not feature finished space on this level. This can be quite confusing and difficult to convey in an appraisal report if the lower level were not viewed as a basement. Identical townhomes, one with a finished lower level and one without would then feature different square footage figures. One may ask after reading such an appraisal, how can identical homes built by the same builder, in the same neighborhood, not be the same size? The easiest way to work around this issue is to call this lower level basement. We can then adjust for amount of finished square footage on this level. Prior to the implementation of the UAD requirements placed upon appraisers, the practice of calling the lower level basement on three story townhomes was reserved only for the neighborhoods where this was observed on a regular basis. Since UAD has now standardized how we are to view homes, we can no longer use this practice in only select neighborhoods. If we are to use this practice, we must use it for all townhomes. There may not be any townhomes in the complainant’s neighborhood that feature an unfinished lower level but due to the UAD, if we use this practice, we must practice this for all three story townhomes. 4. The appraiser used comparable homes with less square footage, fewer rooms and fewer bedrooms, and inside townhome units as opposed to our outside unit with large yard. There was no concession given for our lot size being significantly larger than those in the comps used (.24 acres). The appraiser also disregarded a similar home to our having sold recently for $210,000. a. In addition, the appraiser used a home almost a mile away from our home when the home that recently sold for $210,000 was not used as a comparable home. Comparable sales with less square footage, fewer rooms, fewer bedrooms were used in the report. Interior unit townhomes were used in the report. These sales were used as they appeared to be the best available at the time of inspection. Research revealed the subject’s neighborhood to be one of the highest selling neighborhoods within the general market area. As the subject’s neighborhood featured limited sales activity over the previous twelve months, it was necessary to use comparable sales located in the general market area, outside of the subject’s neighborhood. The highest selling townhomes, located in the general market area were used for this appraisal which was not the intent of the appraiser, but ultimately the outcome once analysis was completed. Additionally, the subject’s site was adjusted for in comparables 3, 5 and 6. More importantly though, the subject’s end unit location was adjusted for against the interior unit comparables. The complaint references using a home almost a mile away from our home. It was necessary to expand the search parameters to over one mile in order to find comparable sales that would match or bracket the GLA or square footage of the subject as research revealed no comparable sales matching or bracketing the higher end of the subject’s GLA or square footage, located in the subject’s neighborhood or general market area. Research did reveal homes located within the subject’s general market area matching or bracketing the subject’s GLA or square footage. These sales were not used as they did not appear to be a good reflection of the subject’s market appeal as they had sold much lower than where the subject’s neighborhood has typically sold at. The complaint references a similar home that had sold recently for $210,000 but gives no address of this sale. Research revealed no townhomes sales within the previous year, located within one mile of the subject, selling for exactly $210,000. Research did reveal a townhome sale, selling nearly a year ago, located 1.4 miles from the subject selling for $210,000. It is located in the same neighborhood as comparable 4 which sold for $211,000. 5. The appraiser stated that no upgrades have been done in the home in 15 years yet we had almost $50,000 put into the house before we moved in for new hardwood flooring, doors, windows, roof, siding, air conditioning unit, and other items of high value. The statement the complainant is referencing is in the condition field of the improvements section which states “C3;No updates in the prior 15 years;…” This statement is a UAD automated response statement added to the report when a certain box is checked in the report software referring to specific kitchen and bathroom updates. It is not indicative to the entire house. The UAD requires certain items to be addressed. Depending on how they are addressed, the UAD will add very specific lines of commentary to the report, this being one of them. The appraiser cannot change any of the automated responses the UAD implements. The updates and upgrades to the subject were taken into consideration during the selection of the comparable sales. The appraiser does admit the upgrades should have been listed specifically and individually in the report as all upgrades were accounted for in the research and analysis completed on the subject property. In response to the desired settlement, where the complainant states I have provided fraudulent services: As stated in the report, the appraised value for the subject appears to fall in line with the historic values for the subject’s neighborhood. Over the previous five years, the subject’s neighborhood had seven sales ranging from $169,000 to $222,000 with a median value of $195,000. The contract value for the subject falls outside the range of values for the subject’s neighborhood. If sold, it would be the highest sale in the neighborhood over the previous five years. The contract value does not appear supported by the current market as the highest sale in the neighborhood at $222,000 is a waterfront property with a boat dock while the subject is not waterfront and does not have a view of the water. With the next highest sale coming in at $202,000, it would appear potential buyers would be willing to pay at least $20,000 more for the waterfront homes as compared to the homes in the neighborhood that do not feature a waterfront location. Given this data in addition to the data listed in the sales comparison approach, it would appear the final opinion of value is supported in both the subject’s neighborhood and general market area. In summary, it appears a large number of the issues associated with the complaint appear to be due to a lack of experience in reading residential appraisal reports as a large number of the concerns were addressed within the report. As stated in the report, “The intended user of this appraisal report is the lender/client and HUD/FHA. No additional intended users are identified by the appraiser…”. As this report is not intended to be read by anyone other than the client or lender and FHA/HUD, it was written in a way to accommodate a reader versed in residential appraisal reports. Readers not familiar with UAD and FHA reporting requirements may have some difficulty in understanding all aspects of the appraisal report. If there are any additional concerns, my contact information is listed below. Thanks, [redacted] Certified Residential Appraiser 1303 Bull Finch Court Newark, DE 19702 Phone: (302) 750-9898
Revdex.com:
I have reviewed the response made by the business in reference to complaint ID [redacted], and have determined that this does not resolve my complaint. For your reference, details of the offer I reviewed appear below.
I have detailed our rebuttal for each of the appraiser's responses to our original complaint below. We do not accept his response and continue to find errors in not only his appraisal but also in his professional judgment. We request a full review of his appraisal by a superior in the field and adjustments be made accordingly, as this is an FHA appraisal and his errors will cause this appraisal to stay attached to our property for six months, which is unacceptable. The link to the more appropriate comparable sales (and how we arrived at our asking/contract price) can be found here: [redacted]
Appraiser:
The appraisal report lists the home as having a total of 3 bedrooms and 2.1 bathrooms. Due to UAD guidelines, a half bathroom is no longer indicated as 0.5. It is indicated as 0.1. So a home with two full bathrooms and one half bathroom would be listed as 2.1 not 2.5. In the appraisal, both the improvements section and the sales comparison grid show the total bathrooms as 2.0. This is due to the location of the half bathroom. The half bathroom is located on the lowest level, the garage level. This level, though above grade, was considered basement based on the functional utility of the level. Therefore, since the half bathroom is located on the “basement” level, it could not be added to the total bathroom count per Fannie Mae and Freddie Mac guidelines. It is included in sales comparison approach, in the basement field, formatted as 1rr0br0.1ba0o in the report. The 0.1ba represents the half bathroom.
Our Response:
The "functional utility" of the lower level space is not equivalent to that of a basement, rather, it is a completely finished family room. Nothing about this level is typical to that of a basement. There is a full walk-out to the backyard, a half bathroom, pantry, carpeting and entertainment area. Per Fannie Mae and Freddie Mac guidelines, this square footage must be included to the total bathroom count. The functional utility of this room should prove our point of the errors made in this appraisal.
Appraiser:
The appraisal lists your home has having a GLA or gross living area of 1,640 square feet as the lower level was considered basement based on the functional utility of the level. If the lower lever were not considered basement, the total square footage of home would be 2,180 square feet and not the 2,000 square feet the county states. As stated in the appraisal report, the home was measured in person and varies from the public records. The square footage listed with the county often varies from the square footage listed in an appraisal. This can be due to a number of reasons. The guidelines for calculating the square footage vary between the county inspectors and the appraisers. Additionally, the county may have used building plans in calculating the square footage while the appraiser measures the existing structure.
Our Response:
The functional utility of the lower level is not equivalent to that of a basement; therefore, the total square footage should be the 2,180 square feet the appraiser states above.
Appraiser:
Comparable sales with less square footage, fewer rooms, fewer bedrooms were used in the report. Interior unit townhomes were used in the report. These sales were used as they appeared to be the best available at the time of inspection. Research revealed the subject’s neighborhood to be one of the highest selling neighborhoods within the general market area. As the subject’s neighborhood featured limited sales activity over the previous twelve months, it was necessary to use comparable sales located in the general market area, outside of the subject’s neighborhood. The highest selling townhomes, located in the general market area were used for this appraisal which was not the intent of the appraiser, but ultimately the outcome once analysis was completed. Additionally, the subject’s site was adjusted for in comparables 3, 5 and 6. More importantly though, the subject’s end unit location was adjusted for against the interior unit comparables. The complaint references using a home almost a mile away from our home. It was necessary to expand the search parameters to over one mile in order to find comparable sales that would match or bracket the GLA or square footage of the subject as research revealed no comparable sales matching or bracketing the higher end of the subject’s GLA or square footage, located in the subject’s neighborhood or general market area. Research did reveal homes located within the subject’s general market area matching or bracketing the subject’s GLA or square footage. These sales were not used as they did not appear to be a good reflection of the subject’s market appeal as they had sold much lower than where the subject’s neighborhood has typically sold at. The complaint references a similar home that had sold recently for $210,000 but gives no address of this sale. Research revealed no townhomes sales within the previous year, located within one mile of the subject, selling for exactly $210,000. Research did reveal a townhome sale, selling nearly a year ago, located 1.4 miles from the subject selling for $210,000. It is located in the same neighborhood as comparable 4 which sold for $211,000.
Our Response:
Many of the homes used in the comparable sales portion of the appraisal should not have been used in the first place. The appraiser admits that they were dissimilar in all aspects of the properties (room count, bathroom count, square footage, etc), and that "adjustments" had to be made. For this reason, the sales prices of these homes can not be used as comps as the market in which they sold is completely different than the market in which we are attempting to sell. As the appraiser admitted, we are located in the highest-priced neighborhood, yet he only used one comp from our neighborhood and instead chose homes in the surrounding, less desirable areas. The appraiser admitted that he had to go outside the typical one-mile radius for comps; however, when doing so, he specifically chose comps dissimilar to our property. There were many other possible comps that he overlooked that can be found here: http://matrixweb.trendmls.com/Matrix/Public/Portal.aspx?ID=1290562740.
In addition, not many homes sell on our street or the adjacent street of our neighborhood very often. If we were to extend the time frame in which comps can be used, you will notice the appraiser states "comparable home sold on the adjacent street for $222,000 five years ago." Appraiser states that previous high water mark for a waterfront property in this neighborhood was $222k five years ago. The market is in a much better state than it was five years ago. To compare the current market to that of five years ago, and to set a limit on the entire neighborhood based on that assumption, is an error in judgment on the appraiser's part. If we add a very modest 2% each year for inflation and appreciation, this particular comp would be able to sell for $245,000 in today's market, which is a very fair price. Even if we concede that this property is "superior" to our property, the appraiser said that "potential buyers would be willing to pay $20,000 more for waterfront properties." Based on this statement, our contract price of $225,000 falls right in line with the valuation of an appreciating market. For the appraiser to deduct $31,000 from our contract price, based on incomparable "comps" and putting a cap on the neighborhood based on a sale that was five years ago at the bottom of the real estate market, is inappropriate and flawed. If we were to look at [redacted], which settled back in October 2014 for $199,000 ($5,000 more than the price our appraiser put us at), you will see that this particular property is significantly inferior to our property. It is an interior unit with .06 acres, as opposed to our end-unit with .24 acres. To appraise our home at a lesser value than an interior unit with a significantly smaller lot, from two years ago, is yet another error in professional judgement. Again, assuming a modest 2% adjustment per year for inflation and appreciation, and the fact that our property is 4x the size, and that our property has had over 50k in upgrades and improvements in the past 7 years, our property can not and should not be appraised for less than this inferior property.
Appraiser:
The statement the complainant is referencing is in the condition field of the improvements section which states “C3;No updates in the prior 15 years;…” This statement is a UAD automated response statement added to the report when a certain box is checked in the report software referring to specific kitchen and bathroom updates. It is not indicative to the entire house. The UAD requires certain items to be addressed. Depending on how they are addressed, the UAD will add very specific lines of commentary to the report, this being one of them. The appraiser cannot change any of the automated responses the UAD implements. The updates and upgrades to the subject were taken into consideration during the selection of the comparable sales. The appraiser does admit the upgrades should have been listed specifically and individually in the report as all upgrades were accounted for in the research and analysis completed on the subject property.
Our Response:
The important thing to remember about this property is that over $50,000.00 in upgrades and improvements have been done within the past 7 years. The appraiser stated that the roof looked to have "at least 2 years of life left" on his original appraisal; however, the roof was replaced 7 years ago with 30 year architectural shingles. For the appraiser to blatantly state that the roof was anything but improved/upgraded, is a major flaw in the appraisal. In addition to the new roof, there is also new siding, new windows, new exterior Anderson doors on all three levels, new hardwood flooring, new upgraded carpeting, new HVAC, new 80 gallon water heater and a new fence. When we purchased this home in 2009, these upgrades and improvements were adjusted and accounted for within the appraisal, yet Mr. [redacted] denies us any credit for these upgrades and the comps used didn't have these upgrades, either. No concessions were given. Even given an annual 8% depreciation on the upgrades and improvements on the home, after 7 years we should still receive upwards of $28,000 in credit for these items, as they would allow the new buyers to purchase an upgraded and move-in ready home.
Another blatant error is that he specifically noted that our property did NOT have a fence. However, numerous pictures on his own appraisal report show our newer fence. When material facts like this are blatantly omitted it calls into question the entire appraisal report and the professionalism of the appraiser. To miss such an obvious aspect of the house means that all other facts on this appraisal report are questionable.
In summary, it appears that our complaint is not a lack of experience in reading appraisals; rather, it is a compilation of numerous errors in material facts as errors in Mr. [redacted]'s professional judgement. When an entire sale is dependent on the opinion and judgement of one person, it is paramount that their skills and judgement be nothing short of impeccable. The facts that we have laid out clearly call into question the ability and judgement of Mr. [redacted]. Furthermore, since this is an FHA appraisal, this now sticks with our property for 6 months, which prevents us from selling our home to a potential FHA buyer who agreed that our home was priced appropriately when all factors were taken into consideration.
Regards,
[redacted]