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Well, in 2004 we got a 30 yr investment loan at 5.5%, and were lucky to get that, now 3.125 for a 15 yr seems doable, if I can get a decent appraisal.

G-P, BCB would do a rate adjustment only up to 1% without a full application & appraisal.

The only thing we have done with lenders since the bubble are refis -- we ended up with the same lenders -- so in one case they skipped doing an appraisal -- but in the other the new appraisal came in the same figure as before the burst.

Anyway -- here is a NYTimes article if you haven't seen you might find interesting... Westchester-when-the-appraisal-sinks-the-deal:

http://www.nytimes.com/2012/06/17/rea ... -sinks-the-deal.html?_r=0

I had Pamrapo before. Their loan department had some horrible witch that I had to deal with. I had a root canal that was a more pleasant experience than dealing with her.

Never had a problem with BCB, but I haven't had to get a loan since I refinanced everything with them back in 2004.

Post bubble, lenders are required to have a arms length relationship with appraisers. They are assigned one off a list of contractors, and by law have limited contact. And the buyer sure can't choose his own! Appraisals aren't even portable bank to bank, though there's movement to change that by law.

MDM, we got our 1st 2 loans from Pamrapo, now BCB. Nice as their CS person is, their underwriters are a clusterfuck. I inquired about a loan with them on Jan 7, I've yet to get a Good Faith Estimate. I can't imagine if this was a purchase!

I think your lender often really influences your appraiser -- best to see if you can choose one off their list of approved ones -- or even better to get the right to use someone not on their list. ...but I agree -- most are lazy suburban fools -- and keep in mind that they work for the lenders day in and day out... and low appraisals are often in the banks/lenders interest.

Back when I was buying properties (1997 to 2001), appraisals was a major issue. The biggest problem I had at the time was I renovated the properties and got 40% or so more in rent than surrounding properties. The appraisals would not take in account rent income and would only appraise me based on resale value. The properties I was being compared to had not yet been renovated.

I found out later the mortgage underwriter does have a lot of influence on what the appraisers come up with. For example, when Emigrant mortgage underwrote by Belmont Ave property, they put restrictions on what the appraiser could use (they limited the value of the improvements). Then Emigrant knocked down the appraised value even further. The reason given was that the building was only 17 ft wide.

When I moved all my financing over to Bayonne Community Bank, my appraisals improved dramatically. The bank allowed on my Beacon Ave property to take the rent roll into account, which gave me a much more realistic value.

I don't have as many details to back me up, but I've experience pain, frustration and stupefaction with the appraisal process myself. Every time I have bought or sold a property (I've only bought primary residences so that's not a long list), I mean every time, the appraisal has been among the worst parts - the part that causes the greatest anxiety.

My experience has been that appraisers know next to nothing about the city or its neighborhoods. They try to do everything remotely (on-line I guess). They never come up with comps that are realistic in my opinion and, as a result, have always undervalued the properties. It's a major pain in the ass when local buyer, seller, realtors, attorneys all agree (in writing) that a property is worth $n, and some appraiser from God-knows-where says "no, I think it's only worth $n-2." Unfortunately the banks go with them and your transaction is now totally hosed.

Good luck with this.

BEWARE THE RANT!!

Frankly, I'm getting a little paranoid here. I've gotten 2 appraisals for a refi with baldly bad measurements and suspiciously pat numbers throughout. Looking at the NY Case Schiller, & Zillow graphs for the city and neighborhood, values should be about where they were when this 3 family appraised at purchase for $335k in 2004. Additionally, at that time the place was poorly maintained, it was all shabby and the yard looked like the Mekong Delta. We totally renovated one unit that was an uninhabitable wreck, laid laminate in all 3 units, carpeted & painted the halls, and did extensive landscaping in the yard including 3/4" gravel and wood fences. The disaster of a house next door was taken down and replaced with new condos, improving the block. In the tight inventory market here today I'm sure could list this place 3 blocks from the Congress light rail for $340k and have a bidding war. I know, I lost one at that price on a similar property in Hilltop last year. But I got an appraisal for $325k, and when I walked and tried another lender it was for $270k.

Here's the entrance to the rabbit hole and why I walked. That $325k, he understated the gross building area by 20%. Every single freaking appraisal calculation on that form uses the GBA as a coefficient! He refused to reconsider the appraisal. The second appraiser understated by 15%. Both these appraisers were apparently unable to accurately describe the external size of a simple rowhouse. It's a rowhouse, with a ground floor extension. All living space above ground, flat roofs. They each only needed 4 numbers: L & W of the main building and the extension. Seems odd.

Further down the rabbit hole. Appraisals have a variety of different methods of arriving at value, and the final is supposed to be an interpretation of them. The 1st appraisal raised my eyebrows when all his methods of evaluation, rents, rooms, units, GBA and bedrooms, came within a $9k range, less than a 3% variation with just one outlier, replacement cost being $340k. Seemed suspiciously neat. But that was nothing compared to the 2nd, he got them all to fall within 1.4% of $270k, varying by only $3,800! What precision! What obvious nonsense. This one didn't even bother to fill in the fields for value by rooms, units, GBA and bedrooms. It's clear why, had he done so value by BR would have been $357k, and with the right # BR on the comp it would have been $415K! Correct calc by room comes to $345k. Can't have that messing up his neat numbers.

What's really a riot is that one of the primary comps on both appraisals was the same $275k property, and somehow they got different numbers from it: 16 rooms vs 12, (city records say 13), 9 BR vs 6 (city records say 5) and GBA 2400 vs 2006 (city says 2510). Fascinatingly, #1 used a photo for this comp of a corner building that simply doesn't even exist on that 10 block street. He didn't get the address wrong, it's not there anywhere. Lets not even get into comping a brick to frames with no adjustments, that's a given.

Finally, the capper was the numbers used for the cost approach, one said the lot would cost, $95k, the other $150k. Even better was the construction cost data: one said $120/sq ft, the other $90/sq ft, but they both cited the same source: Marshal & Swift Contracting! (do they even exist, never seen a truck for them) You would think the price of a empty lot could be nailed down closer than a 58% variation or one source would be more consistent.

So, my impression of the appraisal process for the reports I've gotten is this: they glance at some comps, instantly decide what they think the value is, then groom all the numbers to support what they decided, doctoring the cost numbers, the drawing for sq ft, and even numbers from the comps to make everything look pretty. Every time I go over these reports I find something else suspicious. But all the appraiser has to do is say "tough" and he walks away with your money, with the bank behind him. I'm thinking of calling my credit card bank and disputing the charge for the 2nd. I can easily prove the report is hooey. The bank for the 1st never charged me, I guess they knew it was crap too.

RANT OVER

Has anyone had an appraisal recently and gotten some fishy numbers like me? What are your replacement cost numbers? Especially lots outside Downtown.