Trials and Tribulations With Appraisals

Man Yelling

I have had good and bad experiences with appraisers here in Coconut Grove.  There are some appraisers that come here from outside the area and are completely unfamiliar with the nuances of the Coconut Grove market.  But I will respect the final outcome of an appraisal if fair comps are used even though the outcome may not be favorable to my clients.  Recently I had a property that did not appraise by the bank and when I took a look at the appraisal I was shocked to see several things wrong.    I wrote the following letter to the bank expressing my frustration with the appraisal and requesting that they send a new appraiser out.  

Let me preface this by saying that in no way are realtors permitted to request a specific appraiser for their property or improperly influence an appraiser.  But it is acceptable to offer the appraiser comparable properties that you feel support the sale price and to submit a letter to the lender notifying them of issues/concerns/inconsistencies that you have with the appraisal itself.

This letter also shows how important it is to work with a realtor who is intimately familiar with the local real estate market.  

To Whom It May Concern:

My name is Riley Smith and I am the listing agent for the property located at “xxx”.  The purpose for this letter is to express my concern and disappointment over the appraisal that was recently completed.  I am a Coconut Grove specialist, have been selling residential real estate here in Coconut Grove for over 10 years and know this market extremely well.  I would like to point out some inconsistencies in the appraiser’s approach to coming up with his value.  It is my hope that you will take this under advisement and order a new appraisal.

1.  My first point.  On 2 of the 3 closed comparable sales, the appraiser took a picture of a property that does not correspond with the address or the numbers he is using.  This to me is a sign of very sloppy work.  Example #1, the photo at “xxx” is actually a photo of “xxx” a property which I am intimately familiar with since it was my listing.  Example #2, the photo of “xxx” is a property that is not in a gated community and has a 1 car garage when I know for a fact that the actual address and numbers he used is in a gated community and has a 2 car garage.

2.  When the appraiser spoke to my assistant at the subject property, he explained to her that appraisers are not supposed to take into consideration properties that are more or less than 20% of the square footage of the subject property.  However, he then goes on to use as one of his only 3 closed sales a property that is higher than 20% and that property happens to be the one that is pulling this appraisal down.

3.  Another key component to his appraisal is his use of two actively listed comparables.  Both of these properties are located in a neighborhood that is not comparable to the subject property although they are only several blocks apart.  If he had local knowledge of the neighborhood he would know that any property sold between X Street and X Street must be discounted for the quality of the neighborhood.  You are no longer in walking distance to the center of town and you are now in a neighborhood that is surrounded by heavily trafficked streets and commercial properties.  There are several dozen actively listed properties that are higher in list price and closer to “xxx” property that would have been proper comps.

4.  There has also been a new closed sale since the appraisal was done which I understand was not the appraiser’s fault.  The address is “xxx”.  The sales price was “xxx”.  It was my buyer who purchased the property so I am intimately familiar with it.  It is a block and a half away from the subject propert and is in a gated community, the same as “xxx”.  The square footage is only slightly larger.  This property sold for “xxx” a square foot, which would certainly support the sales price of “xxx” for the subject property.

5.  The appraiser told us that he had to use comparables that were fee simple, however one of the active listings he chose to use was not – it was listed in the tax rolls as condo.

In summary, it is clear to both listing and buying agents that this appraiser did a disservice to the transaction, seller, buyer and lender because of his lack of knowledge of the local area.  I would implore you to send someone who is experienced in this area to do this appraisal again.  I am extremely confident that there are comparables that will support not only $xxx for the subject property, but higher.

Thank you for your consideration, you can reach me anytime on my cell phone at 305.342.1623 or by email at

Riley Smith