There's rarely a week that goes by when a Buyer, Seller, or an acquaintance doesn't contact me in panic about the undervalued bank appraisal they just received on their refinance or equity loan.
I know exactly how you feel . . .
Bank appraisers are like meter maids - they have a penchant for ruining your day.
Cliff and I have been considering a kitchen remodel for years, so when our friendly, local banker asked us if we would like to increase our current equity line (now that home values have improved considerably), I jumped at the chance. Who knows when banks will tighten the flow of funds once again?
"We don't actually have to spend the money," I explained to my reticent husband, but if we DO decide to move forward, we know the dollars will be available to us." (Of course, I'm hoping we spend the money; I need a new kitchen, like yesterday.)
Moreover, IF we should decide to sell when our youngest heads off to college, the kitchen will need a sizable face-lift anyway (I know these things.). Why not enjoy the benefits of a new and improved kitchen while we still live in the home?
Having successfully persuaded my husband (sort of), I gathered our tax returns and obediently handed them over to Wells Fargo. Since we already have an equity line in place, expanding it, was simply a matter of confirming our income and ordering a new appraisal.
"Congratulations," Patty said a few short weeks later, you and Cliff have been approved for the additional dollars."
"That's great," I responded, "So where did our house appraise?"
That's when the bomb went off . . . Say what?
Never mind my short-lived joy at having been approved for the larger loan and the fact that I would soon be meeting our architect to finalize plans, I was admittedly upset at the Appraiser's failure to understand the true quantitative value of our home.
I'm not referring to its "market value," I am talking about its actual WORTH! And because I am a REALTOR by trade, I had even arrived with comps in hand to help the Appraiser along. Clearly, she had ignored my informative prompts.
I get it, banks are conservative by nature with respect to equity lines (and probably should be) and our house is difficult to accurately appraise. While it's not GRAND by Piedmont standards, it is fairly unique; offering 4 bedrooms/3 new bathrooms, beautiful gardens on expansive grounds, a picture- worthy gazebo, a swimming pool, a separate cottage & office, and a batting cage! (What's not to love?)
AND given that a similar style home in the center of town had just set a new sales bar, I assumed the Appraiser would be equally impressed. That certainly wasn't the case - not by a long shot. Based on that sale, her appraisal was at least half a million dollars off . . . or more. (Ouch.)
Here's the thing, appraisals are just one person's opinion of value; they actually tell us nothing about what the market will bear, OR where the house will sell. In reality, the appraisal (anemic as it was) did exactly what it needed to do - it got us the funds to (potentially? absolutely!) remodel the kitchen, so what's my BEEF? Who cares what the appraisal says today when Cliff and I don't have plans to sell the house for several years to come?
Okay, here it is (although I'm loathe to admit it) like many homeowners, I have a fair amount of EGO wrapped up in my house. (Do tell?) I don't just sell homes, I am passionate about them, and about mine in particular, which has evolved into something I believe is truly special. (Sound familiar?) AND to be blunt, I have worked my fingers to the bone on our home. I don't just hire gardeners, I am the gardener. Don't I deserve a little validation; some tangible proof that my vision has paid off? Is it really too much to expect that the appraiser get it right? (Evidentially, it is.)
So I am throwing a party instead and inviting my colleagues, neighbors, clients, and friends to join me. (What are friends for anyway if not to mend your bruised ego?) I have rented a LARGE movie screen, hired a caterer, and am putting my son and a few of his buddies to work as we participate in an evening of "Starlight Cinema." If all goes well, I will happily make this evening an annual event.
AND I am going to try to remember that Cliff and I bought our current home because we imagined gatherings just like this, along with family Thanksgiving dinners, elegant Passovers, and fun-filled Fourth-of-July festivities; not because of its "appraised" value (our homes aren't meant to fill in a balance sheet).
I will recall that we bought our home for the lovely community it offered, for the high-ranking schools, and for its unlimited potential. Perhaps one day, we will even see a garden wedding there??? (It could happen.)
What an out-0f-area Appraiser thinks about our home's value should be of absolutely NO value to me whatsoever - beyond the loan approval. Still, I'm not inviting that Appraiser to my party.
She can go ruin someone else's day.
Julie Gardner, has been writing The Perspective for 15 years and has published more than 500 essays. She is also a frequent contributor to the Sound Off column in the Real Estate section of The San Francisco Chronicle.