I am in the process of buying a house. The house is listed at 2149 square feet, but I had my doubts as to whether that was correct and based on a lot of information I had I came to the conclusion that 2149 was, in fact, high. However I "knew" that the appraisal process would give me an accurate square footage and I felt comfortable that once that was over I would feel better about what exactly I was getting. I told the appraiser myself that there was a square footage issue and I really needed to know an accurate figure. She assured me I would get one. So we get the results of the appraisal and the trained professional told us that the house was 2269 square feet, which is simply impossible given the outside dimensions of the house. I told my lender I was not satisfied with the appraisal, but have yet to demand it to be re-appraised. I even finally got my hands on an original floorplan from the builder, showing the house to be 2040 square feet, about what I was thinking. When I told my lender this, he said that plans don't always match up with the building (??) and a couple feet here and a couple feet there can add up. Even the appraiser told him that the difference was within her margin of error of 100 square feet (which, even given the 2149 listing size, it wasn't). Needless to say I'm not impressed by the process. I know exactly what the appraiser did, I figured it out tonight. She took the overall length and width of the house, multiplied, and then subracted the area for the garage. That would work except for the fact that there is a covered patio and covered entryway that are not inside the house. Very sloppy work. However, the appraisal came back right at the sales price, so in the lender's eyes everything is a-ok. Here are my questions: am i justified and right to demand a re-appraisal? i know the main issue is simply whether the house is worth the loan, and since i now know the correct square footage i don't need that question answered. what about simply demanding the measurements the appraiser took? since i have the actual floorplan, i want to demand them not to check them but to make the appraiser squirm since i'm pretty sure she didn't even make them. why should i pay $325 for this ****-*** work, other than because i won't get the loan otherwise? and a question about the appraisal process in general - what good is it? lenders tell the appraisers a "suggested value" of the house and, guess what, the appraised value came back exactly the same. where's the professional training in that? i guess what i thought i was getting was an accurate portrayal of my property and a really honest opinion about its worth and what i ended up getting was nothing close to that. should i feel slighted or is that just the way it goes?
Have you looked up the county appraisal district's square footage estimate used for taxation? Lowering your house size will lower the valuation of the "improvements", if even very slightly in this case, and I guess could save you a few bucks in property taxes.
The appraisal is not really for your use or protection. If the lender is satisfied with it then that is all that is important. If the difference in the size of the house is important to YOUR valuation, then you would need to take that up with the seller.
Ok Nick, that's exactly what I needed, thank you. And the issue with the county's appraisal is a whole other bag of cats. They have it at 2149, which is what the current owner, who also happens to be the original owner, swears it is. Well also in the past the garage had been converted into 2 bedrooms, upping the size to almost 2500 square feet, and was apparently being taxed at that size. Somewhere in the conversion to rooms and conversion back to garage the size got messed up at the county. Also, for no good reason, this house has the street's highest tax assessed value, even though it is not the largest or nicest house on the street. Another issue I need to take up with the county.
While it's somewhat painful to realize that the appraisal process isn't terribly objective, it's a waste of time to fight it. It's downright amazing how often the appraisal comes in at EXACTLY the proposed sale price. It doesn't even make you wonder. The reason they call them windshield appraisals is because they are reputedly done through the windshield of their car as they drive by. They aren't paid well enough to do a the type of appraisal they are probably capable of so they basically warn the lenders when the sales price is WAY off and the lenders are generally cool with that. The taxing authority is often a pain. They generally won't take your measurements and they generally round off numbers. They also say something to the effect that "minor deviations" will not affect your taxable valuation. The last time I had to protest, they reluctantly agreed that they had improperly added my basement as livable area and therefore had overestimated my house by 2,500 square feet (more than 50% over), but removing that 2,500 square feet did not change their valuation.
So maybe we need another thread on fighting property taxes. Just looking at the values from the surrounding houses, they are all well below this house, for no good reason. Even the land value on this house is higher than everyone else. Yes, it's a corner lot, but the other corner lots are all valued the same as the rest of the street. What are the things to do/say in fighting your tax assessed value? Also, yes the appraisal came back at exactly the lender's "suggested value" that they gave the appraiser. What bothers me is that I spoke directly with the appraiser, told her that we wanted to make sure to get a full appraisal and not a drive by because of the issue with size, and she still didn't do it.
So the appraiser did a full or a drive by appraisal? Its the mortgage company that orders the appraisal.. so if they ordered a drive by then she didn't have to measure the house.
i asked the lender to order a full appraisal. i also talked directly with the appraiser and told her we needed a full one, which she said was ordered.
If you paid $325 for a drive-by then you got hosed. So did she actually measure and inspect the property? If so then you should have gotten a 1004 and not a 2055. Anyway, the objective of the appraisal is not to give you an accurate value of the house (the market does that), but rather to protect the lender as someone mentioned earlier. I've been an appraiser and I agree that there really is no need for them in most cases. The mortgage company gives you a figure and the appraiser finds a way to back into that price. Usually. You can call the Texas Appraisal and Licensing Board @ 465-3950 if you feel you received a suspect appraisal. I absolutely hated appraisers like that when I was in that field. Including a covered patio and covered entry into the gross living area is unacceptable. By the way, if you did in fact receive a full appraisal then legally there needs to be a sketch of the property included in the body of the report.
1) The square footage calculation is living area only (includes only for finished living areas) Covered patios/garages are NOT included in your overall square footage. So even if you ***** about it, another appraiser will do the same thing. That's standard throughout the industry - tax or otherwise. However, adjustments should have been made for amenities such as patios/garages to arrive at your overall value. 2) Yes, original floorplans/builders plans often do not add up to what is sitting on the ground. This is standard as well. Maybe this will help.
Reread your post and realized the appraiser did screw up. I would demand a copy of the appraisal, look at her floor plan sketch, and recalculate the real square footage of the living area for your own information.
If I am reading this thread correctly, Nick is 100% correct. If this is an appraisal made by the lender to determine if they will make the loan or not, if they are happy and will loan you the money just go with it. It makes no difference in any taxable value (that's all done the the city/county) I think the general rule is that if the house is in good enough shape so the lender wont get hosed on a dump in event of a foreclosure, the appraisal will come in a few thousand above what you are paying. My county tax appraisal came in much ($10k+) less than the appraisal done by my lender. As far as "gretting the job done right since you paid $325" - forget it. This is a just a formality that the buyer (normally) pays. After going through the first-time homebuyer process I came away terribly unimpressed by the general lack of intellegence, attention to detail, and pride in ones work that was displayed by almost everyone i dealt with. Note to all lenders, inspectors, appraisers, realtors, etc on the board : I'm sure your work is all top notch. I'm sure I managed to find the dumbest in each profession in Dallas. Either way my house is great and I'm very pleased.
The only accurate assessment of the value of the home is what is sells for on the open market. In CA, the tax basis is automaticaly set based on sales price.
JOhnnyM... as far as fighting the taxing authority... that should be no problem for you... what YOU just paid for the house is exactly what the market value is... that # should be your valuation, and if it isn't then you go argue and you should win that one easily... also.. if the house needs any fixing up, then take tons of pictures beforehand... keep those to argue with the taxing authority on the "condition" of your home.. just don't tell them you've fixed it up...
a)Do you like the house for the price given the REAL square footage? If so don't worry about the sloppy appraisal. b) SHHHHHHHH! Accept the "professionals" evaluation and then if you feel wronged after the fact go after them legally and make some money off of their Errors and Omissions insurance. c) See A......
Do y'all ever wonder how big Nick's basement must be? 2,500 square foot basement? What is it, a tennis court?
It might be 2250. The deal is that my house sits on a lot with a small hill. The guy who built it back in 1920 or so excavated into the hill and used the excavated rocks to build the house. The front door is at the top of the hill facing North and the back door is at the bottom of the hill facing South. Only the back door is in the basement. At the front door, the basement is 100% below grade and on the other end it is 100% above grade. It has windows and 4 doors, but it's such a ******* nightmare of an anal probe we call it a basement. The first floor footprint is identical to the basement footprint. Water runs sideways through the limestone somewhere between 0 and 8 feet deep until it hits the North basement wall and then goes down and up through the "floors" which have slabs and channels everywhere. Someone put up walls and then when they found out it flooded they poured another 4" slab, but didn't take out the walls. When I got out the old chainsaw and removed them all, they left a series of channels. That's one of the first places we see the water come in. There used to be a swimming pool on the second floor. I kid you not. It couldn't have been more than about 3 feet deep the way I see it. I don't know how you could support that much weight, but family friends swear they had been swimming in it 60 years ago. It's one funky structure. There are no voids in the walls on the first and basement floors. Solid rock. No wood except in a few partition walls in original construction. No wood in basement construction at all. In order to run a new wire you'd have to jackhammer a groove and then plaster back over it.
I had pretty much forgotten about the appraisal until this morning... So the appraiser had been bugging my agent for payment for the last week and finally I told him - have her call me directly. Well she called, and was not happy. I told her I wanted to see her work before I paid because I didn't believe there was any way she could have come up with 2269 square feet. She was furious. Finally I asked for her supervisors name and address and she was going to give it to me and then just said she'd waive her fee. Thanks. I'm still going to write her supervisor, however. I told her I had an original floorplan and had measured it myself and it was 2040 square feet. She said that different appraisers use different methods and that it was within the margin of error. 229 square feet, 11% difference within the margin? No way. I also told her that I know exactly how she came up with 2269 and that it was because certain things were included (patio, entry) that shouldn't have been...she told me that if I came up with the same number it must have been "pure luck." Why do people think they can be lazy and do ****** work and then get furious when they are called on the carpet for it? Hell I might file a formal complaint against her now as well.
It's a function of the fact that she knows that her client (the lender) doesn't give much of a ****. The fact that her client ends up charging YOU for the service complicates things. From her perspective (not that I'm defending it) it's like "hey dude, what were you going to do with this info anyway? You decided that you wanted to pay x for this house and wanted to get x - 20% from the bank and I helped you out. I don't have the time to spend 5 hours on a residential drive-by and then actually field questions from a borrower." Once again, it's not a justification, it's an explanation of the attitude you got. She'd rather blow off the money than do the work and jack with you.
Yeah Nick that's how I'm feeling...and hey it's $325 so I'm not upset with not having to pay. I finally did get her sketch...and actually based on her numbers you could get 2269. Problem is, I've measured it myself, and her numbers are wrong (some are off by 4-5 feet).
of course the saga continues. i don't even care about it at this point, the appraisal that is. so the appraiser told me that she would waive the fee and call my lender (who is also a friend of mine). well of course she called him but didn't mention the waived fee and asked him for payment. not wanting my friend to take it in the shorts i told him to have her go re-appraise the property and then i will pay her.
If she had any integrity at all she would f**k you up. She would deliver an appraisal that wouldn't justify the loan. But, you watch and will see that removing 10% of the house will mysteriously not affect the value.
First of all I have to call ******** on the ability of a layperson to look at a house and swear up and down the square footage is off by 100 feet. Next, you have to realize that although you pay for it, or should, the fiduciary responsibility is to the company that orders it. This means that the lender and their assigns are the only ones that the appraiser has a legal responsibility to. The appraisal is to estimate the fair market value. Not to provide the best square footage a person can. No place in the appraisal standards does it say they even have to measure a house. It has become standard practice however. And realistically, if a person is considering buying a house, they typically could give a **** if it is 100 feet bigger or smaller. They care about bedrooms, kitchen size, room size, floor coverings, counter tops, how it looks, where it sits, how the yard looks, etc... I have always marveled at the people who try to sue over a hundred foot difference in square footage. I have NEVER heard of anyone coming close to winning a suit like that. Also, an appraiser is not your protector. If you want to make sure a home is solid, hire an inspector. If you have concerns about the actual square footage of a home, get your lazy *** realtor to measure, or you do it yourself, BEFORE you put a contract in or make that a contingency in your contract. Appraisals ordered by a mortgage company are to determine if a lender has adequate collateral for their loan. Period- end of story. They are not for you nor are they to benefit you in any way. If you have doubts about anything, hire your own appraiser who will be responsible to you instead of the lender. And another question - what the hell was your Realtor doing through all of this? And about the complaining of the cost of an appraisal. 23 years ago out of college I bought my first house. The appraisal fee was $325. A real estate transaction has a bunch of necessary parts. Educating yourself to that process and the responsibilities of each party involved goes a long way towards your happiness in a transaction.
I understand your points eggroll, but I think I have a right to be a little upset about this appraisal. First, it's not a 100 foot difference, it is a 229 foot difference which makes up 11% of the house. To me, that is substantial. My biggest concern was that the appraisal came back at the purchase price but the appraisal was based on an 11% larger home...so my concern was that the true appraised value would not satisfy the lender. Also, is it not standard practice for an appraiser to actually go inside a home? We have now found out that she did not enter the home. I cannot imagine she is doing all she is expected to do under the statewide standards. Appraisers are expected to inspect (although not to the extent of an inspector) the inside and outside of a dwelling. She didn't do that. When she got called on it, she was upset. Had she just done her job, thoroughly and correctly, the first time this would not be an issue. I understand the process, and in fact had my own real estate salesperson license about 6 years ago. I did not understand this appraisal or the way I was treated by the appraiser, and thus brought my situation on here.
Those are valid concerns Johnny. Since you held a license as well, you realize the market value is estimated based on what typical buyers and sellers in the area pay. I agree going down 200 feet in size is a bit different, but really, many families would rather have 2000 feet of wood floors than an extra 100 or 200 square feet of carpet or sheet vinyl. My point is square footage is the most overrated part of real estate. When you or your wife (if) are knocked off your feet by a house I think there are dozens of reason besides square footage that it happens. I think thats what drives market value. Price per foot just tries to quantify it. You have a right to be pissed off if the appraiser was supposed to go in the house, make a full appraisal (1004) and had specific instructions to measure it. More and more common are shorter form (2055) appraisals that may or may not require the appraiser to enter the home or even get out of the car. And it depends on the lender whether they would be required to provide a sketch even if they did do an interior/exterior. I would find out exactly what type of appraisal was ordered. If it was a 1004 appraisal, or if it was a 2055 Interior/Exterior "with a sketch", you have a case if she didn't go into the house. If it was just a 2055 Exterior, or a 2055 Interior/Exterior withOUT a sketch, then she was just doing her job. Sounds to me like you have a good grasp of the situation and the telling sign is that the appraiser tried throw sand over the appraisal when she was exposed. If she didn't do the job that she held out that she did, I would turn her *** in to the State. How great would the industry be without corrupt appraisers, Realtors, inspectors, loan officers, builders etc.
The Bone is also correct. When I had a square footage contest with my tax appraisals office, they told me that builders usually take the size of the concrete foundation and multiply it times the number of stories on the house. Total ********. So I told them I wanted to contest the square footage and they sent out their appraisers and recalculated it....i.e. counted LIVING SPACE ONLY. They had to subtract out the garage and take into account that the 2nd story was smaller than the 1st. That brought my square footage down from around 2400 to 2150. It made a good difference with my property taxes. Think of yall the poor ******* out there that are paying higher property taxes simply b/c they don't know the real square footage of their house.
Horn1: That is a different situation than the one at hand, although you are 100% right - ******** it is. Taxing authorities' appriasals have a very direct impact on a bottom line cost to the buyer. The appraisal ordered by the lender only matters if it doesn't justify the loan. In that case, protest your *** off if you think it's unfair. In this case they could have overstate the sq footage by 2k and it wouldnt affect any costs to the buyer (other than being pissed at paying $325 to a moron) Eggroll: I understand what you are saying about "fair market value", but if you are actually suggesting these residential appraisers are coming up with these home values based on their thorough understand of the markets involved you are deluding yourself. The only reason they are so close to the actual sale price is because they are given the sale price upfront. Without the sale price being given to them there would be no way they would come close 80% of the time.
