Appraisal question: Are foreclosures always appraised in comparison to other foreclosures in the area?
Question:
Answer:
A foreclosure is not a typical market transaction, and would not produce a price between a typical buyer and seller.
If the mortgage company ordered an appraisal with the condition that only foreclosures be used as comparable sales, this would constitute a departure from professional appraisal practice. The appraiser clearly note and analyze the fact that all comparable sales were foreclosures.
Since the Uniform Standards of Professional Appraisal Practice requires a disclosure, and since you are entitled to a copy of the appraisal report, you should review the report for the appraiser's departure notes. You will need to thoroughly research the facts, especially that all the comparable sales were foreclosures. I
f it pans out, and the appraiser did not account for the condition of sales for the comparables, you need to contact the mortgage company. You need to do this as a first step, so that you can document your efforts to correct the report or acquire a new report. If the mortgage company will not, then contact the appraiser and inform the appraiser that the condition of sale is needed for the report, and that your next contact is the state appraisal board.
You probably will not be able to work with your mortgage company. They likely have tried to market your loan based on the appraisal, and were unsuccessful. A new appraisal for them will be useless. You need a new mortgage company and a new appraisal. Do yourself a favor and find comparable sales that support the true market value of your purchase. Give these to the appraiser and ask the appraiser to consider these sales in the sales analysis.
I would think that it would be appraised to other houses in the area, foreclosed or not.
the appraisal should be done on comparible houses regardless of their status as foreclosure or owner sale. comps are based on like or similar properties in the area and on condition
Did the appraiser even go into the house ? I had a problem with sq foot on a house and come to find out the appraiser never measured the property . I contact the state agency that regulates them and found out they don't have to in ( Virginia ) . How did you pay the appraiser ? I had a appraiser come in way low on a house and refused to raise it . I did a CMA on the house so I knew he was low . I called him up and reminded him that I paid him with a credit card and I was going to denied payment thru the credit card company . Long story short he raised the appraisal . He should compare to house to other that have sold just not foreclosures .
No, that's not normal or even acceptable. Seeing how you were disappointed that it appraised lower than expected (which would be my ideal situation!), I am assuming that you're getting bank financing and that appraiser was sent by the bank. If that's the case, have the bank do another appraisal or submit the comps to the bank.
Regards
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