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LETTER: How can rational folks put faith in old-fashioned appraisals?

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Letter to the Editor

in Opinions

Tuesday, November 10. 2009

Comments (7)

Dear Editor:

My family and I built a home in Madison County five years ago. We went through what seemed a normal process; construction loan, finish the house, get an appraisal and the transition into a regular mortgage. Everything went as planned. The house and land appraised for a figure well over what the loan was and the bank was happy to give us a mortgage.

Two years ago, in need of some money to complete construction on another project, the need arose to explore taking a second mortgage on our residence. Another appraisal was done on our home and I was told that it was now worth about one third less than it was when it was completed five years ago.

Of course this was a shock, since my insurance, taxes, groceries and everything else seemed to be increasing in cost.

Now here is the straw that broke the camel’s back. In an attempt to restructure some debt with a hometown bank, again the “trusted” appraisal was done. This time, our house is worth less than it was when it was built. Now as my taxes, insurance and most other items seemed to go up, I’m wondering how rational folks can put all their faith in these old-fashioned appraisals. You could probably not purchase the land and materials and have it delivered and stacked for what the appraisal lists as a fair price for our home. So I must have missed the memo about my taxes and insurance being reduced.

Sincerely,

Bill Hodges

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#1 MJ Cadwell on 11/10/09 at 08:08 AM [Reply]

Welcome to Madison County Georgia!

P.S. I didn't get the memo about taxes and insurance being reduced either!!!

#2 MC Taxpayor on 11/10/09 at 08:13 AM [Reply]

I watched land in MC go from $1500 acre range or less for rural areas to $4000-5000+ acre in several years in my view and closer to Athens got unreal in my view ( look at recent forecloures and large acreage ). Some people feel that prices were artificially inflated. Banker told me " charge what market will bear " but that penalizes others who have lived in the area for years. Now some of these appraisals issues are getting people in some areas arrested. Then consider so call conservation tax breaks. If someone gets reduction of cost issue then someone have to make up that difference. That is you and I. I would like someone or some organization to review all conservation tax parcels. Farmers should get this break as should tree grower for example. American/Ga taxpayor on the hook it seems but there is a silent trend / movement to not vote for system that got us here. New political faces in MC and this is a wonderful county to live.

#3 Builder somewhat on 11/10/09 at 12:50 PM [Reply]

Some builders charge more than should. Some framers charge more than average / some brick layers charge more than average. Bill look at people nearby and see what at court house they paid for land and all. Give you idea of issues. Same home / same land by two different persons can have large differences in cost for same product.

#4 Anonymous on 11/10/09 at 06:14 PM [Reply]

umm recession ?

#5 Certified Appraiser on 11/11/09 at 06:42 AM [Reply]

Mr. Hodges, the appraisal process is not a science it is an opinion. The market dictates the final market value for your property. Once a typical buyer sees a new home or a distressed home that are in foreclosurer the typical buyer will purchase that property because they think they are getting a deal. Well, this in turn reflects on our market values as well. During this time period you are likely to get a lower market value however; 6 months from now your value may be 50K more and you did nothing to the property.
So, basically, do not blame the messenger, blame the economy and the mindset of the typical buyer in your market.
As far as insurance and taxes, the cost to build a home has decreased due to supply and demand of building materials. Insurance companies will rely on Marshall and Swift and the tax assessors do as well. So, given the decline in cost of materials, and the need to purchase destressed sales, the overall values in the county has depreciated.
As, a Certified Appraiser, I would suggest, hang in there, the supply within the market will subside eventually and the rest of us will then see our property values appreciate.

#5.1 Ben Had on 12/12/09 at 06:27 PM [Reply]

Appraisers get alot of work from banks, and they want to keep it that way.
Would you want to dissapoint someone that was sending you alot of business?
If the bank wants a low apprasial,they get it.

I trust bankers,lawyers,doctors, and politicians about as far as I can throw them. oh yeah, include appraisers in that crap toss as well.

ps. I've been investing in Real Estate for 22 years.I do have some experience in these matters.

#6 Anonymous on 11/20/09 at 11:55 AM [Reply]

Well, if our property has depreciated - why haven't our county taxes come down?

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