Have a weird situation going on with our house that we are selling, and wanted to get some thoughts from the experts on this board.

Buyer put in the offer and we accepted at 1% below asking only a few days after listing, mainly because we are moving out of state and wanted to close quickly.

It's an old house (built in 1896) in a historic district, so it's a bit unique.Wood siding, and truthfully, needs a new paint job, but nothing out of the norm for homes in this area with wood siding. Inspection came back and verified this, so we agreed to pitch in some cash for a new paint job to get the process rolling.

Appraisal comes out and it comes out VERY low (at least, in my mind). 13k below contract price. Buyer agrees to meet us halfway. Again we are fine with this.

We then find out that the home sale is contingent on repairing paint and wood rot... before the sale. This is a conventional loan, btw. Now, we've been in the house for only 3 years, and it was pretty much the same as it was when we bought it. Reluctantly, we agree, but we take out the cash that we were offering for painting.

I hire someone to do the repairs and replace the wood rot called out in the inspection to the best of my abilities, because the appraiser didn't call out the exact spots he wanted repaired.

Appraiser comes out to do a re-inspect and says we haven't done enough. The re-inspect called out an inspection by a professional to be performed, paid for by the seller, after the repairs. How can he stipulate who pays for the inspection?

I call the appraiser to get an understanding of exactly what he wants, but he doesn't answer so I leave a voicemail. He doesn't call back within 4 hours, and I'm feeling anxious because we are supposed to close in 6 days (3 business days due to holiday weekend) so I try again with no help. I have a feeling he is screening my calls, so my wife calls from her phone and low and behold he picks up. He says he has been advised by his clients (I always assumed that the appraiser works for the lender, not the buyers or sellers) to not talk to us and refuses to speak to me over the phone to detail what he wants done.

The whole thing feels fishy to me, my listing agent, and broker. They have indicated they will be filing a formal complaint, and I will be to, but wanted to get the thoughts of the board since I'm pretty sure there are appraisers on here.

The buyer's realtor is his mom, who hasn't ever sold or bought a house we have found out.

Quote:

---

The re-inspect called out an inspection by a professional to be performed, paid for by the seller, after the repairs.

---

Just do the inspection yourself and send it in all clear.

That won't work. It has to be the original appraiser

SteveBott said:

---

That won't work. It has to be the original appraiser

---

He's asking for a "professional inspection report"

Now I've got an inspector I use who will do it for me. But, again this seems highly out of the norm for a conventional loan.

A couple of things. First the appraiser can delegate in certain circumstances but its still their call. I have never had an appraiser do this though. Your agent should be all over the buyer's mortgage guy to help clear this up. He will not get paid unless it closes. The appraiser technically works for the lender but they cannot interact with the appraiser about any value related issues. Most mortgage guys take a completely hands off approach to be safe and not get in trouble. Im not one of those but in the small minority.

The lender most likely hired an Appraisal Management Company or AMC. That is where the lender/mortgage guy can go to. And he should. The AMC gets paid by the lender so that is where the best leverage is in the deal.

To complicate things it will also depend if the appraiser submitted his value based on the repairs completed. If he did the lender will also demand repairs. If it was not sent with a TBC then you have more flexibility on how to repair and inspect. If he did, he should personally be doing the re-inspection and the lender will require him and only him. He will most likely charge a second trip fee, around 150. If he did not submit at TBC then you can just negotiate with the buyer directly and go from there.

FYI getting a new appraisal right after the first one would have been a whole lot cheaper but at this point a new report would raise a red flag, maybe, to the lender since they surely have seen it. If you dispute right away the report probably could be replaced since the underwriter will just see the more favorable report.

Good luck

Dallas good catch! I missed that angle. I highly expect it is a TBC in the report. OP if you have the report, which is not given to you the vast majority of times. my email is in my profile and you can send me the report and I can quickly tell you if it is

DallasAggie0 said:

---

Don't do SF but I've never seen any sale contract automatically become contingent (without agreement) on some items being repaired?

You need to find out if the appraisal value is "as is" with the value of the depreciated items accounted for because you could be getting hit twice with those repair costs

---

I'll def check that. Thanks.

It wasn't automatically contingent on the repairs, but I guess the lender wouldn't approve since it was in the appraisal? So we agreed to go ahead and get the repairs done so that the appraisal would come through and we could get this thing closed. The re-inspect is now calling out the "professional inspection", which imo, is bull***** It's not a huge problem for us, but I believe that this appraiser is going way beyond the scope of his job.

The appraiser is also the owner of his appraisal company.

In hindsight, I wish we would have called for a re-appraisal. I wasn't even aware that it was possible to ask for a different appraiser?

Couple things to remember, nothing absolute, but may explain some things.

1. The appraiser is likely not the one ordering things to be repaired, it is more likely the buyer's lender. The appraiser may have an obligation to point some things out that are obvious like wood rot, missing shingles, but they should be disclaiming they are not a licensed home inspector and they are making note of something for the lender. The lender would be the one that says we will not fund the loan until these are rectified.

2. It's not surprising the appraiser doesn't want to talk to you as you are not an intended user of the report or the client. He/she has to be careful and they may actually not be allowed to talk to you because of this. If you were added as an intended user, that would be different.

3. Being a house that old makes it pretty tricky to find comps. If there are no real comparables to support the value that have sold in the last year and in a decent geographic range, that is a tough appraisal. Adding to that, if it's on land, or your house or the comparables have had extensive updating or not, then there can be all kinds of condition adjustments, etc. Just something to keep in mind as it can be pretty slim pickings to find comps for something like this.

Again, I'm just pointing some things out, but I think your focus should be on the lender, not the appraiser. The buyer should be clarifying what exactly needs to be done to release funds from their lender.

1. Just checked the appraisal report... It was made "subject to" so I assume, that means subject to the repairs being completed.

The problem is that his original report just said "wood rot" and "peeling paint" and didn't clarify exact locations, which I feel is lazy.

I repaired the one spot of wood rot that was called out in the buyer's inspection report, but now the appraiser wants me to hire a professional to examine my house for more locations of wood rot. That seems like the job of the original licensed inspector, not mine.

2. That makes sense. Thanks for clarifying. I really only wanted to get the specific locations from him so that I didn't have to keep guessing as to what he was talking about.

3. Yeah. This is definitely true. His comps were all over the map and not really comparable, but it's definitely an issue in this area. Our home is only a block away from the downtown square, with lots of shops and restaurants (McKinney, TX), but is being compared to homes over a mile away. Not really something that can be factored into the appraisal I guess, but a big reason our home is valued is because of its proximity to the square.

I can understand your frustration, particularly as a seller who is willing to work with the buyer on these issues. The appraiser should have made note of areas or at least taken pictures of examples wood rot and peeling paint. There is a section on the form that asks about the soundness and integrity of the structure, and it's possible they may have checked that box which could have raised red flags to the lender. It's not uncommon for lenders to require appraisals to be "subject to" on older homes that have some obvious need of repair.

Without knowing the full details, it sounds like they are potentially trying to cover their ass by requiring a professional to inspect since they've made note of it and don't want to be held liable down the road. Again, it could be the appraiser here, but I suspect the lender is the one pushing things, not sure though.

Yep, you're location probably made it even more difficult as they would now need to have comparables to adjust for age, condition, and location.

Best of luck on the sale though and I hope it gets worked out.

The ONLY way the lender put this on their condition list is the appraisal report. And yes the appraiser should have listed the specific problem areas with pictures in the report

Correct, and I agree and will clarify by saying now that the appraiser has made note of it in the report (which is not out of line if there is wood rot), it is more likely the lender is the one pushing the issue about repair or contingencies. I doubt the appraiser is and they shouldn't be as they are not a licensed inspector and cannot presume to be one or risk liability. Point being, if you want answers or clarification, you or the buyer need to speak to the lender since they decide whether or not to release the money.

We've found out the lender and buyer's mom (also his realtor) are very good friends. Sounds like they are pushing it then.

Sigh I feel I keep repeating myself.

Joe NO the mom and the originator have NO influence on the appraiser. He wrote his report without any influence from them unless they met him at inspection. I know the mortgage guy did not any contact with him but the mom could have but extremely doubtful.

Edit: follow the money. Who paid the appraiser? The lender not mom or mortgage guy. He is protecting the lender not anyone else

SteveBott said:

---

Sigh I feel I keep repeating myself.

Joe NO the mom and the originator have NO influence on the appraiser. He wrote his report without any influence from them unless they met him at inspection. I know the mortgage guy did not any contact with him but the mom could have but extremely doubtful.

Edit: follow the money. Who paid the appraiser? The lender not mom or mortgage guy. He is protecting the lender not anyone else

---

Yes. I am following the money. The appraiser is paid by the lender. The lender and realtor/mom are very good friends. The buyer wants the house painted, so the realtor tells the lender to not accept appraisal if the house isn't painted, which is out of the norm for a conventional loan. That's why I said that the lender and mom are very good friends?

The "lender" is NOT the mortgage guy. He works for a lender or brokers to them. He has NO CONTROL OVER THE APPRAISER OR HIS REPORT.

I give up. Good luck.

You literally said, unless they met him at inspection?
That's what I'm wondering and what it feels like. Again, it's not common for this to be called out on an appraisal.

You are obviously very invested in this, though. Thanks for your help. Seriously.

Ok did the inspection point out the problems?

Just the one wood rot spot already repaired (after appraisal request), and a statement that paint was peeling, though not mentioning specific locations.

Appraiser is now saying that we need to prove there are no more wood rot spots on the home, even though original inspection only called out the one spot.

Edit: and by inspection, I mean inspection by licensed professional inspector. Not the appraisal inspection. I already mentioned that the original appraisal only required a non specific repair wood rot and repair peeling paint.

The lender doesn't know who the appraiser is until the report is in hand. They certainly didn't go to the inspection. Subject to repair appraisals aren't uncommon.

jja79 said:

---

The lender doesn't know who the appraiser is until the report is in hand. They certainly didn't go to the inspection. Subject to repair appraisals aren't uncommon.

---

Of course they aren't. But for basic peeling paint on a conventional loan where the seller has already agreed to pay for repairs, they are.

When the appraiser tells us that he has been advised not to speak to the homeowner by his clients, I get suspicious that something is going on behind the scenes.

The pressure point for the realtor is the inspector. She does have selective control on that vendor. Since the inspector did not note other areas and whose job is to comb the house I doubt she had an agenda. And it is much easier to negotiate during the option period.

I think you got a rogue appraiser who went out of normal practice for them. Nothing about his actions are normal. And if you believe the AMC told him not to talk to you think again. Appraisers are notoriously stubborn. They can be real *****s sometimes. You got a bad one and it happens.

I'd just tell the buyer this is their problem. Line up financing that works with your previously agreed sales price, and repair agreements when you guys negotiated a price after inspection.

They can't come up with financing?
Not your problem.

Lt. Joe Bookman said:

---

When the appraiser tells us that he has been advised not to speak to the homeowner by his clients, I get suspicious that something is going on behind the scenes.

---

This is standard. Many clients have language in the order request that we are not to discuss matters with anyone other than them.

Good to know. Obviously I deal only on the buyer side. But I'll state as a fact if my client has a problem with an appraisal they will contact you. Regardless of the legal stuff of who owns that report they think they do. They paid for it.

The good news I have an great AMC for your services.. hopefully you are on their list. Momentum

Good news, indeed!

aggiebq03+ said:

---

I'd just tell the buyer this is their problem. Line up financing that works with your previously agreed sales price, and repair agreements when you guys negotiated a price after inspection.

They can't come up with financing?
Not your problem.

---

This is what I would do. You got an offer within a day at only 1% lower than asking. They don't want to lose the house - I'd take the risk of possibly having to relist... doubt it would happen unless they barely have a minimum down payment.

Also, wondering if you can you put repairs as a sellers concession into escrow and put it on the buyers to fix?

SteveBott said:

---

Good to know. Obviously I deal only on the buyer side. But I'll state as a fact if my client has a problem with an appraisal they will contact you. Regardless of the legal stuff of who owns that report they think they do. They paid for it.

The good news I have an great AMC for your services.. hopefully you are on their list. Momentum

---

Yes, I do some work for them.