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Another week and a big update on the refinance. We had an appraiser came by our place last week and we got the report's results Friday.

The woman stopped and was really sweet. I went through the house with her as she asked questions. She then said she'd be exploring the neighborhood and getting some comparable homes.

House Appraised For Much Lower Than We Expected

Our townhouse is now valued $20,000 less than what the county assessor lists it.

We can go ahead and continue with the refinance, but we'd have to also pay mortgage insurance, which would eat up the savings.

Builder Problems Are Our Problems Now

A development we recently found out about was the builder for the development is having financial troubles.

They build in different states and while their homes in Raleigh are steadily selling (not a sizzling market, but solid) their other locations are not.

In fact, they've been pushed to sell their remaining inventory as quickly as possible even if that means lowering their prices.

That means that new builds are starting off at cheaper prices. That of course lowers our values.

If you could get a new house built for about the same prices, wouldn't you go for it rather than a 2-year old place lived in by another family?

Combing over the appraisal, though, I feel good about the long term prospects of the townhouse.

She had some notes regarding our place and the area that matched up with why we purchased it in the first place.

  • This area is developing fast.Shopping centers are nearby and some of the best schools are in this part of town.
  • Congestion is being addressed. The one drawback with this area was the traffic at certain points of the day and that's getting addressed now. Roads are getting widen and new roads have been created to accommodate the new neighborhoods coming up.
  • We're the most affordable neighborhood in this area. Prices just a block away and there really isn't much in our price range elsewhere. On the other end of the street, new town homes are coming up (different builder) and their prices start higher than our neighbor's high end.

So I guess it's wait and see for us.

Hopefully we can refinance at a later time and the interest rates will be favorable. If not, we're alright. Our mortgage payment is within our budget and we're happy that it's not underwater.

Oh what about that $500 that's unaccounted for? That was what we paid as a good faith deposit for the refinance.

We won't be seeing that soon, will we?

Next Steps with Our Finances

One thing that we want to do this week is to send this information to see if we can have our property taxes lowered, by presenting the appraiser's report.

Perhaps we can shave off just a little bit of money.

However, it looks like it might be difficult. Here's what I read on the county's site:

Wake County assessed real estate values reflect the market value as of January 1, 2008.

Any inflation, deflation or other economic changes occurring after this date do not affect the county's assessed value of the property and cannot be lawfully considered when reviewing the value for adjustment.

The January 1, 2008 assessed values remain in effect until the next county-wide revaluation, which is currently performed every eight years.

There's an appeal process, but as I'm understanding it, we may not qualify.

Please note that changes in market or economic conditions occurring after the effective date of a revaluation cannot be lawfully considered when reviewing the assessed value for adjustment.

(This will be a fun process…..)

We're still going to try though, so maybe some financial good can come of out of this recent appraisal.

Getting the bad news Friday certainly made for a happy weekend- we decided to stay at home and enjoy our undervalued place.

Perhaps we'll get started on some small projects to spruce it up.

Thoughts on Appraisals

How much is your home worth? What value is your property tax based on? How much do you think it's really worth?

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

13 comments add your comment

  1. That really sucks about your appraisal, but I think you’re getting hosed by wake county. That’s basically when the recession started! They prob would be losing out on millions in prop tax if they adjusted values!

  2. That’s terrible about the appraisal…do you have any cash to do a cash-in finance to avoid PMI? Or does it not make mathematically sense?

    If you aren’t refinancing do you have another financial project in mind?

    • Right now we’re looking at keeping our accelerated payment schedule.However, we may just instead focus on the student loan starting next month. We haven’t really had a chance to sit down and chat. I’m going to pull out the old spreadsheet so my husband and I can be on the same page.

      • Spreadsheet! I love it. My wife and I always make sure to say ” let’s check the amortization schedule” in our nerdiest voices.

      • Yep; my husband and I both love our spreadsheets. It helps us keep track of everything in one spot. We tend to use good Docs and share. It makes it easier to keep tabs on each other :)

  3. That is rough, but isnt it still worth considering the refi even if you have to pay pmi? Assuming that the pmi only eats up the savings (as opposed to substantially raising your total payment), you would still come out ahead because once you build up 20% equity again the pmi goes away and you are then left with the lower rate. If it is doable in your situation, you could consider the amount you need to add to equity to drop pmi to be a high priority debt and pay it off as quickly as possible.

    • Good question! If the refi would’ve gone through we’d be paying around the current amount we do now. With PMI it increases the costs that we’d rather put into another goal – like paying off the student loan.

      The two of us need to sit down and discuss our next step.