Drive by appraisals

[Anonymous]

I am applying for a home equity loan and have the choice to do a free drive by appraisal, or to do a traditional appraisal for $400.

What is everyone's experience with drive by appraisals, and how did they turn out for you? Did you end up challenging them? Did you fall back to a traditional? Did it work out just fine?

I'd love to hear from everyone. Thanks!

[krielly]

Is the $400 appraisal still an option if you contest the drive by value they arrive at?

If so, I'd go for the freebie, and only spend the $400 if necessary....

[MASTERNC]

I'd agree to start with the drive-by but be ready to pony up for a traditional appraisal.

I just had one CU come back saying the appraiser (who was just looking at comps) lowballed my value twice.  Neither value exceeds the price I paid nor reflects recent sales in the same neighborhood (they probably include foreclosures, fixer-uppers, and lower priced homes in less attractive adjacent developments).  Might be declined for my HELOC because of that.  I wasn't offered a traditional appraisal.

Just put in a third application, which may require a paid appraisal.  It's a shame, because the no cost HELOCs were very attractive.

[StartingOver10]

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@Anonymous wrote:

I am applying for a home equity loan and have the choice to do a free drive by appraisal, or to do a traditional appraisal for $400.

What is everyone's experience with drive by appraisals, and how did they turn out for you? Did you end up challenging them? Did you fall back to a traditional? Did it work out just fine?

I'd love to hear from everyone. Thanks!

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I am a Realtor and have issues with appraisals coming in too low about 50% of the time. These are on sales/purchases and not on HELOCs nor HELs. We end up having to renegotiate the sales price whenever there is an appraisal issue. (edit: or have the buyer bring in the difference above appraisal or compromise or cancel- those are the choices).

But it is my experience with my clients that even on HEL's or HELOCs the appraisals are coming in very low, To give you an idea one of my sellers obtained a HELOC last Sept 2015 and the appraiser valued his home at $265k and 3 months later we sold and closed the home for $309k.  Huge differential - not all due to time difference. The HELOC appraisal was a drive by + an automated valuation determined by the HELOC lender.  

[Anonymous]

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@krielly wrote:

Is the $400 appraisal still an option if you contest the drive by value they arrive at?

If so, I'd go for the freebie, and only spend the $400 if necessary....

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I need to call them tomorrow to verify that exact thing.

If all I can do after the drive by is file to have them reconsider (with my own comps and research), and not then go to a traditional, I will shell out the $$ for the traditional to start. I can always add the $400 to me HEL amount if the appraisal goes like I hope

[StartingOver10]

Once the appraiser comes up with a value they won't change it if you challenge it without an egregious error.  Even then they will make every excuse in the world to change the error and not change the value.

I would tread carefully here....