Erin Attardi's Blog

GRR. UGH. YIKES.

Before I enter in to what could be perceived by many as a bit of a rant, I want to just state for the record that there is a time and place for the Zillow website and its "Zestimates" of value. If you are a buyer or seller currently using Zillow to gain a perspective the the Sacramento real estate market, attempting to see what homes in your area are selling for, researching the potential value of your home, or something of that nature - good for you and please keep doing so.  That is what the website is intended for - "recreational use."

If you are a loan underwriter using Zillow to second-guess an appraisal by a California State Licensed Appraiser - WHAT ARE YOU DOING???

I got a call on Tuesday from a loan officer I am currently engaged in a transaction with, with good news and bad news. "Erin, great news! I have conditional loan approval on the 35th Street file!" Naturally of course the very first question to roll off my tongue is "That is great Marlena - what is the condition that we must clear?"

Her answer? "Oh, the underwriter wants more recent sales comps for the appraisal...but everything else is good to go."

Hmm...I had received a copy of the appraisal the week prior, and the appraiser cited 5 recent comparable sales within the last 90 days, and made lots of narrative comments regarding the value of the subject property. The majority of the comps were higher in value than the subject property, and higher still with adjustments. Seemed like a really solid appraisal...plus, I felt I negotiated the heck out of this transaction, and both my buyer client and I felt they were getting a great deal on a fantastic East Sacramento property.

Turns out that the loan underwriter (the person responsible for making sure the file is complete, assesses the eligibility of the buyer to receive the loan, etc.) went on to Zillow and found other recent sales and second guessed the appraisal. These other "recent sales" were much older than 90 days, and in neighborhoods that are not apples to apples comparable, or in tear-down condition as compared to the house my clients are buying. The ironic part is that the lower value price range and the "Zestimate" listed by Zillow for this property are both HIGHER than the purchase price?  The "Zestimate" was over $100,000 higher than the purchase price!!!...I guess the underwriter did not scroll down far enough on the page to see that?

Anyway, the appraiser provided more relevant comps, revised the appraisal, and the underwriter cleared that condition and we are now drawing loan documents, and are on track to close on time.

Just keeps getting more interesting...