My worst week funding a mixed use flip in Austin last spring

I had three deals fall through in five days because the appraiser kept using comps from outside the neighborhood. One property was a solid duplex near a new transit line but they pulled a sale from three miles away that sold for 40k less. The lender wouldn't budge even after I showed them five closer comps that matched the square footage. Has anyone else worked with appraisers who ignore local data like that?

3 comments

3 Comments

evan_burns9523d ago

Wait, is the appraiser really the one to blame here? I mean, think about it - they have a job to do based on guidelines that are way above our heads sometimes. Using comps from three miles away could be totally standard if the local market is thin or those closer comps had weird conditions like a pending sale or a fixer upper that still needs work. You said you showed them five closer comps that matched square footage, but appraisers look at way more than just square feet - things like condition, lot size, upgrades, even the street noise. If those closer comps were all dated (like from six months ago) or had issues you didn't notice, the appraiser might be doing their job correctly by reaching further out. And honestly, the lender's not gonna take your word over a licensed appraiser (even if they're wrong sometimes) because that opens them up to liability later on.

jana_fox501mo ago

Fight fire with fire and start submitting your own comps to the lender before the appraisal even gets ordered.

-1

keith_rodriguez1mo ago

@jana_fox50 that just makes the appraiser dig in harder on their own picks, trust me.