Posted on: 03rd Jul, 2010 12:35 am
Hello there and thanks for such a wonderful forum! :-) Here goes my query… Hope experts out there can help…
I planned to build a vacation home around 15 months ago. The project was appraised at $500,000 and as expected I got a construction-to-permanent loan. I borrowed an amount of $390,000 and completed building the house.
However, there's a twist. The builder of my vacation home went bankrupt which delayed the project and I had to ask for an extension. Well, my bank was too good and granted the extension and did not even raise my interest rates. But in lieu of this, the bank wanted me to re-close and asked me to get a new appraisal. When the second appraisal was done by the same appraiser who previous appraised the property, the property value was reduced to $310,000. Thus, I had to come up with over $100,000 in cash.
To me, the appraisal looks challengeable. While appraising the property second time, the appraiser chose wrong comparables when there were reasonable comparables available that would have dramatically changed the valuation in my favor. I felt that the appraiser was deliberately trying to value the property as low as they could. The bank is on my side. Nobody doubts my ability to make payments on a $390,000 loan. But the appraiser has refused to reconsider the appraisal. What can I do?
I planned to build a vacation home around 15 months ago. The project was appraised at $500,000 and as expected I got a construction-to-permanent loan. I borrowed an amount of $390,000 and completed building the house.
However, there's a twist. The builder of my vacation home went bankrupt which delayed the project and I had to ask for an extension. Well, my bank was too good and granted the extension and did not even raise my interest rates. But in lieu of this, the bank wanted me to re-close and asked me to get a new appraisal. When the second appraisal was done by the same appraiser who previous appraised the property, the property value was reduced to $310,000. Thus, I had to come up with over $100,000 in cash.
To me, the appraisal looks challengeable. While appraising the property second time, the appraiser chose wrong comparables when there were reasonable comparables available that would have dramatically changed the valuation in my favor. I felt that the appraiser was deliberately trying to value the property as low as they could. The bank is on my side. Nobody doubts my ability to make payments on a $390,000 loan. But the appraiser has refused to reconsider the appraisal. What can I do?
If the appraiser refuses to change his value, there is not much you can do about that. After all, it is just an opinion; his opinion. Other options such as a second opinion from another appraiser is strictly at the discretion of the bank. If they are unwilling to consider a second appraisal, you could also think about using another bank.