My Inquiry to the NC Appraisal Board Staff

I’ll share with you today the email I sent to the NC Appraisal Board staff. It should be obvious to all that the appearances of what is going on at the Vue concern me. Brand name lenders and their appraisers somehow get the values all wrong; a White Knight,, somehow finds appraisers who see the building differently. Can anyone at least blame the Vuebuyer blog for questioning this?

Below is my note to the Board staff.  In a special Saturday post, I will provide the response. I found them to be extremely helpful and willing to work with anyone who wants their appraisal investigated. All one has to do is submit their appraisal and ask. While I have some appraisals in hand, I cannot submit anyone else’s. It will need to come from you. So if you wish to get complete clarity on the process, it will take an investigation by this board. They are more than willing to assist. Below is my note!

To the NC Appraisal Board Staff,

I called today and spoke with some very helpful appraisal investigators
that suggested by sending a note you might be able to help me. Here is my situation.

I currently have a unit that I contracted for at the Vue Charlotte, a newly
built 51 story tower in Uptown with 409 units priced from $300,000 to well over
$1M. Over 200 pre-sales contracts like mine were signed back in 2005/2006, and
the project was delayed several years but was recently completed. The first
buyers were able to move in during the month of August 2010. It is now March of
2010, and of the 200+ contracts, only 14 units have closed.

What has been troubling to me is that the Vue’s Preferred Lenders,
companies like Wells Fargo and Bank of America, were recently “let go” and a new lender, GuaranteedRate, was brought on. Suddenly, we are now seeing appraisals come in at contract. With the old lenders, their appraisals were coming in at 10-40% off the original prices paid during the real estate peak in 2005. Admittedly, these appraisals mostly came in prior to these 14 units that have closed.

I began a blog in July 2010 to help buyers share their thoughts, feelings,
experiences, and plans for closing or not closing on their Vue units. During
this time we have seen the Vue sue buyers who didn’t close for “specific performance.” These cases won’t be resolved for months to a year. In the meantime, buyers are struggling to either find a way to pay for their unit or decide whether to walk way and
take their chances legally. There are contract disputes because there is some
feeling that just forfeiting their deposit is the Vue’s legal remedy. The Vue believes that is not a legal remedy and that buyers who can afford their unit should be required to close
despite the fact the market values have decreased.

The help I am looking for is to understand whether this new set of
appraisers are following the ethical guidelines that your organization helps
set. Appraisers are reluctant to go on the record saying anything bad about other appraisers which is making my job of just understanding what is within the guidelines and what isn’t doubly difficult.

Given the scenario I described above, I have 2 major questions.

Issue 1:

On the form here is what the new appraisals say:

# of units: 409

# of units for sale: 185

# of units sold: 224

The old appraisal had in the # of units “closed’: numbers depending upon
what had closed during that time somewhere between 0 and 14. So my question is,
in a building where 225 units were supposed to have all closed by Dec 2010, is
it misleading if not worse to say on the form that 225 units are sold?

Second, given that the Charlotte Observer has published several articles about
the challenges facing the Vue, should there be some comments in the appraisal
mentioning these?

Issue 2: Can/should the units that closed, are “pending”,
or are “active” be finding their way into the 6 or so comps that are

The reason I am asking is this. Of the 14 closed units, only 1 was an off
the street current market price sale. The rest were pre-sales contracts signed
in 2005. I have enough feedback to know that these closings would not have
happened were it not for fear of breaching their contracts. In other words, they
are closings done under duress. If no one is buying these units at the current
price levels, is it fair to use the “list prices” or even “pending” where there is no evidence of any kind of buying activity or that these units will ever close, in the comps?

I would be glad to speak with you about this by phone or some other means,
but would really appreciate your help getting clarity on these issues.

The blog in question is …

You will see an appraisal discussion starting I believe last week. I want
to be sure I am on the right track in my posts as well as getting the above
questions answered.

Thanks for any help you can provide.

Mike Smith

Tomorrow, in a special Saturday post, I will provide the response.

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