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What To Do After Receiving a Low Appraisal: An Interview with Jim Dusty of Gordon Appraisal Company

By Jim Dusty

Tell us a little bit about your company and its foundation.

My company was started in April of 1994 in Boston Massachusetts, and in 1997 we opened a Rhode Island office based out of Cumberland that also serviced Eastern Connecticut. We are a full service residential real estate appraisal firm with 5 state certified appraisers who have in excess of 50 years of cumulative experience. All of our appraisers are also FHA/HUD certified and have completed a rigorous vetting and training process in order to be considered part of our team. Our portfolio of clients ranges from the largest banks in the country to local homeowners that are in need of local valuation expertise. We also provide quality control support for nationwide lenders as well as the US Department of Housing and Urban Development. Our firm and its appraisers have a proven track record of quality service, professionalism and expertise.

What is your company's mission?

Our company mission is simple: "To provide our client with the most accurate, quality and reliable valuation available in today's market".

What are some of the services your company provides?

Our services vary greatly depending upon our client needs. Some of our products are as follows:

  • Estate appraisals
  • Divorce appraisals
  • Purchase/refinance appraisals
  • Tax abatement appraisals
  • Listing/buying appraisals/consultation
  • Mezzanine financing appraisals
  • Feasibility analysis
  • Quality control review
  • HUD/FHA appraisals
  • Municipal valuation
  • Expert witness testimony

Can you quickly walk our viewers through the appraisal process?

Sure, the first step is for us to listen to the clients needs and incorporate a strategy that will allow us to accurately satisfy those needs and report accordingly. Valuation of Real Estate and its subsequent reporting can take many forms. There are verbal appraisals, summary report appraisals (like mortgage appraisals), retrospective appraisals, prospective appraisals, etc? Once we understand what the client specific needs are we can suggest the various reporting options and pricing with which a decision can be made. Once we have a plan we start the valuation process which ALWAYS begins with ownership of the property (deed). This is the foundation of the process. A physical inspection is not always needed in order to form an opinion of value. There are some clients that prefer a desk valuation, although these type of assignments are not as accurate as valuations with full inspections. The research process entails investigation of the subject property history, research on current listings, prior sales, withdrawn properties, same street historical activity, knowledge of market conditions (both current and forecasted). Additionally, research at city hall will include looking at the subject parcel or site plan, tax records, permit history, assessment data, and zoning information within the immediate neighborhood and street. All of this data is analyzed, reported and then reconciled in the form of an opinion of value.

What is a "low appraisal" and how does it differ per house/neighborhood etc.?

This question is very subjective as the term "low appraisal" refers to one's opinion. Good appraisers are very objective and must separate bias from real data. Everything must be market supported and verified. I often tell people that we do not get paid based on the appraised value, either high or low, so it really does not matter to us. We let the comparables and data dictate value. If a person feels that they have received a "low appraisal" we often ask them to provide more relevant data and we would be happy to consider utilizing it in our report and reconciliation. Most cases the appraiser has utilized the best available; however, there may be some instances when the client provides better data and the final opinion of value will be raised. There should never be ego in the equation. Our goal is to be as accurate as possible and if there are sales data we are not aware of, then we want to know about it.

Why would someone receive a lower appraised value than assumed?

I am not sure. I can say that we, as homeowners, have a tendency to be very biased when it comes to our own property. That's why when it comes time to value my own property, I rely on colleagues to provide help. Simply because it is impossible for me to be unbiased and subsequently, I know the final outcome will be flawed.

What advice do you have for someone who needs to improve their appraised value?

The only way to "improve their appraised value" is to improve the subject property. The market dictates the appraised value as it compares to the subject value and this is accomplished through the principle of substitution. The premise of this principle is that a buyer will not pay more for a property than an equally desirable property. In other words, an educated buyer will look at most of the options for purchase and select the best value for his/her dollar. This is how the "market is created". The only other thing one can do is pay attention to recent and comparable sales within the immediate neighborhood that may raise the value of their dwelling.

Is it beneficial to enlist another appraiser to see if they list your home's value higher?

Absolutely, like any profession, some tend to be more conservative or maybe just plain incompetent!

What are some consequences of receiving a low appraisal?

Some consequences may be the inability to qualify for a mortgage, loss of a sale commission (if you are a Realtor), I would assume a lower assessment, lower equity line capital, etc. It depends upon what reason you are desiring a valuation. It may be beneficial in a divorce proceeding if you are the spouse buying out the other! It all depends.

What is the best way for people to reach you and or your company?

There are many ways to reach me or my company. Our main number is 1(401) 658-5000 We have full time office staff Monday-Friday 8:30 AM-5:30 PM or you can always email us at mail@gordonappraisal.com.

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