How can a home, which has been sitting on the MLS for almost a year, and at the current price for 4 months, without ANY offers, recently appraise at 97% of the value?
I obviously don't understand real estate......
We agreed to pay for an appraisal for the short sale we put an offer on, in order to convince the bank that it wasn't worth what they wanted. The appraisal came in much higher than our offer (which was about 10% off list....our previous offer was 95% off list when interest rates were lower).
Supposedly, the home is now going to go into foreclosure. It will be interesting to see if we are able to purchase it then....
In the mean time, many homes in my favorite neighborhood have come on the market. Two at prices we can afford, and the rest way above our means.
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If sales are really low there could be few recent comps.
Did you get to pick the appraiser?
If you paid for the appraisal, I'd assume you picked your own appraiser. Do you think it was fair and honest?
We had our mortgage guy pick the appraiser (that way we wouldn't have to get another one, if things went well).
Given the comps she had to work with, I think it was pretty fair.
It's a very unique home, that is not in good shape. So it would be hard to value.
That said, if a home sits for 4 months without an offer, I would say it is worth 95% of list, at the very most....no matter what the comps say.
I read an article on this subject juat recently, here it is:
Title: Toothless rules, bumbling regulators cripple oversight of real estate appraisers
http://biz.yahoo.com/ap/080817/mortgage_mess_appraisers.html?ref=patrick.net
The appraisals are always looking backwards so in a falling market they seem high. I feel the same way about the tax appraisal on my home for this year.
And in a rising market I remember people always complaining about having to put in more cash since the comps didn't justify the price.
btw..did you ever find a reasonably honest mortgage guy?
Look at this as a poker opportunity. The bank may want a higher price, but what is the chance they will find a willing buyer with a higher price prior to experiencing the cost of foreclosure? A Hummer H2 might appraise at $30K but how many willing buyers are there for one with gas still over $4 a gallon?
"btw..did you ever find a reasonably honest mortgage guy?"
I think so....its the hubby of a mom in my mommy group. He seems pretty legit, and is taking my word on my credit, so that I don't have so many inquiries.
The last guy ran it twice.....my active imagination sometimes wondered if it was a business practice to make people's credit scores drop, in order to sell more profitable loans.
Appraisals are crap. Regardless of whether you chose and hired him, his bread is buttered by the banks. That's where he will get his next job. No way is he going to tell a bank they are 10% over. The fact that he even went to 97% makes me think you guys are closer to reality.
Appraisers were full of it during the boom and they haven't figured out how to do their jobs any better in the last couple of years. You guys are out there watching the market extremely closely and have a much better sense of the real value.
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