Got appraisal issues?

These days with the HVCC that Congress requires, there are a lot of appraisal issues. Here's a doozey: I'm representing a buyer of a 4,000 sqft 5 Bed Spanish home on a 21,000 sqft view lot in LA, purchasing it for a great deal: $875,000. The buyers lender, a huge lender, ordered the appraisal. They sent a guy from Corona, and he didn't know the area, and submitted his appraisal at $774,000. The loan officer and I looked at the 6 comparables: 5 were 3 bed comps, 5 were more than 20% smaller, the appraiser miscalculated the size of the lot by over 50%, and the appraiser used a comp on a street well known for collapsing hillside homes. I could go on and on. Now we have to ask permission from the appraiser to re-evaluate, and they can ignore us if they want. What else can we do? My client can cancel, can try to negotiate with the seller (unlikely since the seller will probably accuse us of working in bad faith), or my client can start from scratch with a completely new lender, pay for another $500 appraisal, and hope they don't assign another %&$@#!

The Fed really has some influence

Nationwide sales of "used homes" plunged 17% in December 2009. It was the largest monthly drop in 40 years of record keeping. Why? The Fed didn't extend the their free money bailout tax credit until the last minute, pushing people to complete their sales earlier. A lot like the cash for clunkers program, and where are we at with that now?