Skip to main content

Ask MAC: Property valuation discrepancy of more than $200,000

National Mortgage Professional
Dec 02, 2002

  Dear MAC: I recently originated a $1.2 million loan and was instructed to order two appraisals, which contained a property valuation discrepancy of more than $200,000. There were also differences in the square footage and selling price of one of the comparables. Have you seen this happen before, where two separate appraisers report differently on the same property? How can I remedy this problem?--Ken Rudolph, Aran Capital Dear Ken: Unfortunately, the appraisal process for super-jumbo properties is more of an art form than a science. At LUXMAC, we find that when two independent reports have been ordered simultaneously for the same property, half of them will have appraisal discrepancies. To resolve this issue, our processor or underwriter must often ask the appraiser to address or confirm the inconsistent items, usually via an addendum to the appraisal. Large adjustments to line items, such as quality of construction, time and location can vary substantially from one appraiser to the next. These grid items tend to be subjective and offer the appraiser flexibility when arriving at a valuation. Appraisers are under pressure to never over-appraise a property, because severe legal complications that may result in the event of a foreclosure or short sale. These potential consequences increase significantly with multi-million-dollar homes. Therefore, it is imperative to only utilize appraisers who are experienced in that particular market. Also, be sure to review several sample reports before giving them an order. If the appraisers are, in fact, experienced, then any subsequent requests for addendums and explanations should be fielded graciously. If not, remind them that their profession of appraising multi-million-dollar properties is not a science. They will probably agree with you. Michael A. Covino is president of the LUXMAC Home Mortgage Company. You may e-mail your super-jumbo loan questions to [email protected] or mail them to: Ask MAC c/o LUXMAC 560 White Plains Road, Suite 400 Tarrytown, NY 10591 If your question is selected for publication, you will receive a gift from the LUXMAC Home Mortgage Company.  
Published
Dec 02, 2002
NewFed Mortgage Hires EVP-Chief Production Officer

Industry veteran Jim Janczy will be responsible for sales and marketing.

Sales and Marketing
Nov 28, 2022
Capturing the Market

Keys to Marketing to Single Millennial Women

Sales and Marketing
Nov 21, 2022
How To Define Branding

The key to branding and growing your presence is consistency. Create a plan.

Sales and Marketing
Nov 21, 2022
Waterstone Mortgage Names New Digital Marketing Director

Chik Quintans has over 25 years of experience in the mortgage lending industry.

Sales and Marketing
Nov 17, 2022
NextUs Launches Non-QM-Friendly Home Equity Product: HELOAN

Allows borrowers to take cash out of their built-up equity and preserve their low first mortgage rate.

Sales and Marketing
Nov 07, 2022
Selling Millennials A Mortgage

LOs find it’s more about the message than the technology

Sales and Marketing
Oct 27, 2022