Expert: Jim Root - 4/6/2008

Question
we got a house appraiesd but it came under our loan can i gat a second appraisal.as houses in the same street are priced higher than the one we want.

Answer
Hi RON--

Thanks for your question! Here's the (simple) answer--sure, it's POSSIBLE for you to get a 2nd Appraisal--it'll cost you a 2nd Appraisal Fee-- but  your problem may NOT be solved by another Appraiser's "Estimate/Opinion of Fair Market Value" even if it
is more reflective of your loan amount! Actually there's a (complex) answer to the question that you SHOULD be asking.

And that it, "If I get a 2nd Appraisal-- from a different Appraiser --and it comes in at the amount I need, will the Lender use the 'better' Appraisal to support my loan?"

The(complex) answer to that question is PROBABLY NOT! First of all, most Home Loan Programs (FHA, VA, Fannie Mae & Freddie Mac
set RULES for the mortgages they are involved in) will NOT allow a Lender to use an Appraisal acquired directly by the Borrower and REQUIRE the Lender to THEMSELVES/DIRECTLY order and obtain an Appraisal from a Roster of Approved State Licensed or Certified Appraisers. They make it MANDATORY for the Lender to use the FIRST and ONLY Appraisal obtained on the "Subject Property" in support of a loan being processed.

Before you hire an Appraiser to do a 2nd valuation of the property your interested in & commit yourself to paying for it, you need to check with your Lender to se if they can accept a "2nd Opinion" and use it if it's more like what you need to make your loan work. And if they OK this, can you hire the Appraiser directly OR do they need to select the "2nd Opinion" Appraiser? IT'S
REALLY UP TO THEM!

All that said, my question to you is "Why?" If an Approved,State- Licensed or Certified Residential Appraiser, a "Professional," has determined that the home is worth "X" number of $$$$$'s, why would you want to pay more than that for the property! The PRICE of homes on the same street is NOT necessarily the VALUE of those homes. Prices are set by Realtors based on INFORMAL and CURSORY " Comparative Market Analysis;" while values are determined by Appraisers using a clearly defined "semi-scientific, mathematically-based, systematic series of  actions that provide a very accurate accounting for the worth of a home at a given date in time!

The home your interested in is MOST LIKELY not worth any more than what your current Appraisal says it's valued at--why don't you and your Realtor use that value to negotiate a price that is reflective of the value  that has been determined (The Seller probably CAN'T get a 2nd Opinion to work either, so MAY be 'stuck' with selling to SOMEONE for the Fair market Value you-all have now. Might as well be YOU!)I SUGGEST THAT YOU FORMALLY OFFER TO BUY AND PAY THE FAIR MARKET VALUE ,USING THE APPRAISAL THAT'S BEEN DONE TO VALIDATE YOUR OFFER!

Sorry that your loan process has been upset by a "Lowball Appraisal;" hope you  can get things back on track and get into the home you like at a price that's fair and reasonable. GOOD LUCK, my friend! if i can be of further help, feel free to follow-up!

--JIM