|real estate appraisal, discrimination, black, bias, mary cummins, california, 20 pachecho, paul austin|
This is a case of alleged discrimination in a real estate appraisal. Racism exists but not every appraisal which is not as high as someone would like is caused by racism. I'm not appraising this home.
The owners stated that this is some "racist appraiser code" i.e. "Marin City is a distinct area." Marin City is a distinct area. That's a normal comment. We list cities, neighborhoods. The name of the subdivision is "Marin City." Some of the articles even state it's in Marin City. This is legally listed as a "Marin City redevelopment" area. Paul Austin one of the owners is from and lives in Marin City per his Facebook. He works in Marin City. These people lied about something as trivial as the name of the city saying it was "racist code."
Here are some facts. Home in question is 20 Pacheco St, Sausalito, CA, Marin County, 5 bed, 3 bath, 2,173 sf, no garage, raised home, 70 sf deck, corner lot 9,600 sf near street. No additions. It may legally only be a 4 bed, 2 bath. Dec 2016 they bought it for $550K from a private party. They got an FHA loan for $540,000 so they only put $10,000 down. That means they could have paid less than market value for the home. They have refinanced this mortgage a few times in the last few years taking out more and more money, 7/2017 $540K refinance, 6/2018 $680K, 4/2019 $730K, 8/2019 $40K more, 5/2020 $756K.
It has a computer appraised value today Feb 12, 2021 of $620-$900 with $700K median. Seems reasonable.
They stated they added to the home. It's not reflected in the tax size so it probably wasn't with permits. We can't add unpermitted size to a home but we can mention it. The reason is because if someone reports them, Building and Safety can force them to tear down the unpermitted additions. Please, don't report them. Their property taxes stayed the same so they didn't legally add any area or size to the home.
I just looked at some of their photos. 2019 they appear to have added without permits new retaining walls and a new foundation under the raised home. I think the "entire floor" they say they added was under the home. This is not considered legal gross living area and can't be added to the GLA. If it were added with permits which it was not, you could add the value elsewhere in the report. Based on these photos it looks like they may have done this work on their own. The dangerous work skills shown in the photos show amateurs. I am worried about this. They needed to do soils, geo work, permitted grading... They did none of that and graded this large hillside area.
The home appraised for $989K. That's at the upper end of the computer range. So far that seems okay. Again, I haven't seen the home in person or the appraisals.
They weren't happy with that "older white woman" appraiser (I was not the appraiser) or appraisal so they demanded another appraisal. The second appraisal was allegedly $1,482,000. That seems quite a bit high. In fact it's higher than all the other computer appraisals. Sounds like they may have given credit to unpermitted additions though I can't tell for sure because I haven't seen the appraisal.
I just pulled some comps based on size. The first appraisal appears correct. Homes in the area are much, much smaller. This home is over improved for the area. If you want homes similar size, you have to pull from Mill Valley which is much, much nicer area with estates on big lots in the Mill Valley school system. I think the second appraiser pulled comps from Mill Valley. If you're going to pull comps from Mill Valley, why not pull from Beverly Hills?
The first appraiser may have been limited by the highest recent sale in the area. We can't appraise over the highest recent closed unadjusted sale. Maybe the second appraisal is the one with issues. Maybe because of the quickly increasing market there weren't enough similar sold comparables when the first appraisal was completed. The value has also been increasing very quickly since late 2020 because of the frenzied market. Still, second appraisal was allegedly only one month after the first.
I took a closer look at the home on the map. There are churches, schools, stores near this home. That's a negative. Tax roll now says there are two units there. There's more going on here.
The homeowners stated they added fireplaces (which you can't add nowadays), another deck, new floors and new appliances. Redoing floors and adding new appliances is more similar to maintenance today. Decks don't necessarily add value. There was already at least one deck. They paid $400,000 for the additions. What you pay for additions does not directly translate into added value.
Hopefully the homeowner will post the appraisals but they never do so we'll never know what really happened. They also didn't state the dates so I can't do historical appraisals to check the value. I post this so people realize there could be more to this story. Plus, when you get a lower appraisal and ask for a second appraiser, they send someone out with that information.
Mary Cummins of Animal Advocates is a wildlife rehabilitator licensed by the California Department of Fish and Game and the USDA. Mary Cummins is also a licensed real estate appraiser in Los Angeles, California.
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