The following are posts from a widely used and highly respected appraiser forum. They are all in response to questions by homeowners or potential home buyers.
[Can a unique, historic home be appraised?] Yes, your property can be appraised for market value. Based upon what you offered, the appraisal would likely quite complex and the result may be one where the number and size of adjustments (comparing your property to others) may be “excessive” for some underwriting “guidelines.” If you bank at a local institution (perhaps a credit union?), such may be your best opportunity to refinance.
Your best bet will most likely be to work with a local bank that knows your area and has a loan committee comprised of local folks.
You need to get very “local” with a lender, preferably one that is located close to your neighborhood that really understands your market. Small local bank or credit union is your best shot here. Get past the “loan officer” and speak with the branch manager.
Talk with some Realtor friends and see if they know any good local appraisers that specialize in your type of property in your neighborhood. If so, provide the appraisers names to your lender.
You are not allowed to select an appraiser, but you are not prohibited from “passing along a name” of one or more appraisers to the lender. Then its their choice whether to use them or not.
This can be done, but everything needs to stay as local as possible in order to get a credible and accurate appraisal on your home.
The larger the lender you go to for this type of property, the more trouble you are going to have. They want the loan to fit neatly into their underwriting guidelines so they can package it easily to sell to the secondary market. A complex appraisal with no comparables that does not neatly comply with their guidelines kicks the loan out of the package. The appraisers that were approached about it know this and know an underwriter with the giant lender mentality is going to make them insane with all the stipulations they give the appraiser to try and make the appraisal fit the guidelines. You have to find a lender who understands the uniqueness of the property and that the appraisal is not going to fit neatly into the guidelines. Preferably a portfolio lender but they do not have to be. Good luck.
These are just a handful of reasons, there are many more. My suggestion to you is if you want the home financed, find a local lender that knows the difficulties associated with your market, attempt to determine if the appraiser hired has appraised within your specific market, prepare to pay whatever to get the appraisal done and understand that even after all of this, it may just not be possible to find financing as your home does not fit into that nice little lender box.
You need a small local lender that knows the best appraisers in your market and is willing to pay a customary and reasonable fee for this complex appraisal.
As the others have said you should look to the local lender. The key is finding the lender who will hold your loan in their portfolio. In the past, to avoid the hassles of my loan being sold, I paid a one-quarter percent premiuim to be a portfolio loan. In this case your broker is likely not the answer.
It has been my experience that NONE of the big banks will lend on these type homes because they don’t fit into neat little check boxes. Nor will any of the big banks be sending experienced appraisers – they all use AMCs who hire the cheapest, fastest – not the most experienced.
Brokers typically do not work with the small, local banks or credit unions – there’s no money in it for them. Brokers work on commission – and they are not necessarily working for what’s best for you – they are generally working for what puts the most money in their pockets.
As others have said, your best bet is to go local, preferably with a bank or credit union who has the wherewithal to portfolio – AND who knows the market and has a direct order panel of experienced, knowledgeable appraisers.
I completed a private appraisal on a very unique historic home 2 years ago, advising the owner that the appraisal could not be used for lending purposes, which he understood. This year, he attempted to refinance. He tried Bank of America, Wells Fargo, Chase, Citi. ALL sent out inexperienced appraisers through their AMCs, despite the fact the owner was very clear upfront what type property he had. Not one of the appraisers could value the property because they didn’t have a clue how to handle such a property. Then he tried several mortgage brokers and bankers – same result – they were all selling to the big boys. He eventually went with a small local bank that could portfolio, finally understanding that he would have to pay slightly higher interest – and got the loan done in less than a month.
Bigger is NOT better, especially for unique homes.
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