Real Property Appraisals/appraisal no comps

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Question
Hi I am scheduled to close on Home very soon home is a bank owned forclosure 2000 sq ft ranch with 2000 sq ft basement completely finished top to bottom only one bedroom on the main home or GLA also sits on 4 acres very private and in the mountains of west virgina home was built in 2007 and repoed in 2012 question is everything set to go an now lender is saying because there are no "one" bedroom comps the underwriter is out and can not lend on house also have excellent fico over 800 as well as income but appraiser is saying nothing can be done as well as lender I want to purchase home how do you get around all the read tape thanks for suggestions

Answer
Kris,

If I understand what you have written, the Underwriter is not accepting the appraisal because the appraiser did not provide any 1-bedroom comps in his/her report. Unfortunately, this is a red flag to an underwriter. What the Underwriter and lender are concerned about is the marketability of such a large 1-bedroom home. In the Underwriter's opinion, the appraiser has not supported the value of a 1-bedroom home by using 2 or 3 bedroom homes. The appraiser should have provided a lengthy discussion in their report about this issue.

I hope you are represented by a real estate agent. If not, find one who operates in the area where this house is located. Have your agent, or one you find, assist you in searching for one or more usable comparables that have only 1-bedroom. The way residential appraisers operate these days, the appraiser "may" not have taken the time to thoroughly research this area.

Assuming you find one, or hopefully more 1-bedroom comparables, AND, the sales prices of these additional -bedroom comps help support your sales price, have the agent print out what is called a "client copy" of the listings of the comparables. Submit this to the lender to forward to the appraiser for consideration.

If they still refuse to accept this additional data, you only have two choices:

1. Find another lender and order another appraisal.
2. Negotiate with the lender. Perhaps if you put down more money, they can give you a lower loan amount. Of course, this assumes that you have the additional funds.

Unfortunately, there is no way around this "red" tape.  

Good luck with closing your loan

John C. Carlson
CA Certified General Real Estate Appraiser
Victorville and Diamond Bar, CA
www.jccrea.com  

Real Property Appraisals

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John C. Carlson

Expertise

Any questions regarding commercial and/or residential appraising, appraisals or real estate valuation such as: appraising as a profession, valuation techniques, comparable sales selection & analysis, the new HVCC and how it affects appraisers & Borrowers. Also, questions like: "Why did my appraisal come in low & what can I do about it?" I cannot answer questions about comparable data in areas in which I do not practice. I have expertise in most areas of So. California.

Experience

31-years both commercial and residential valuation experience. State of CA Certified General Real Estate Appraiser, licensed to appraise all property types. FHA Approved. Specialized expertise with historic, architectural & luxury residential property valuation. Experienced in industrial building and small commercial property valuation. Experienced Reviewer of appraisal reports and expertise with intensive forensic reviews to uncover fraudulent appraisal reports. Expert Litigation and Expert Witness experience.

Organizations
Associate Member of the Appraisal Institute. Associate Member of the Certified Fraud Examiners.

Publications
Numerous posts to Blogs. Please "Google" "John C. Carlson Real Estate Appraisals" where a list of responses I have made will show up.

Education/Credentials
Numerous classes by the Appraisal Institute since 1978 in the practice areas in which I specialize

Past/Present Clients
First Republic Bank Wells Fargo Bank California Bank & Trust Preferred Bank Numerous Attorneys.

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