Robbyn -

Please look at my home for sale in Ormond Beach FL MLS#47819 - 3 Burr Oak Court. It is a beautiful, well maintained home with updated kitchen and baths. Recent new roof and many more features including storm film on windows. It is on a large, landscaped lot with vinyl privacy fence in Oak Forest sub., great location, good school district. All for only $259k. Don't miss it!

Robbyn,

I wasn't offended by your statements. No worries =)

As for what happens when the bank lowers the appraisal, since the contract was contingent on financing anyway and the lender is now not going to fund the loan, the financing clause should cover you. These are all things we (REALTORS) are going to have to keep in mind when we're preparing an offer. We have to discuss every possibility with our buyers and try to foresee a lot of possibilities. The lenders are keeping us on our toes!

As for how long it will be before the values start increasing again, I'm afraid it's going to be a while. Right now, the market is showing no signs of improvement yet. If the new tax proposal is passed in January, that's a step in the right direction but that's only a local issue. Since many of our buyers are moving here from other parts of the country, I don't think our market is going to improve much until the entire nation stabilizes.

Robbyn -
I have read your question, and all the replies, and your response.. Her is my question to you:
WHY are you interested in this house? Is it way below market value and you think you can fix it up to meet your expectations?
Is it in a good location?

You say it has potential.......why do you say that? Is that your opinion or are you working with an agent?

You really should work with an agent who is an exclusive buyers broker. Although Florida is normally a Transaction agency state, you can hire your own exclusive buyer agent who will work in your best interest.

You can also hire a real estate consultant, who would do the same thing.
Although I don't work in Ormond (if that is where you are narrowing down your focus) I am a Florida Native, Accredited Consultant in Real Estate, and would be happy to chat with you for a few minutes to see what you want, need, like, etc. and recommend someone for you to deal with.

I've been working in Central Florida for almost 30 yrs, and I know most of these markets, ,and I know most of the good agents - YOU need to have someone on your side.
This is a LOT of money for you to spend, and personally, I'd recommend to bring in an expert to help youmake this decision. The market is so strange right now - it's a great time to buy, but you need professional help to make the right decision.

btw - WHY ORMOND?? Is it close to work? Like the Schools? Why did you single that area out? Why not the West coast? Have you been prequalified? How much can you spend? How soon do you want to buy? Do you have a house to sell and will that be a contingency?

There is more to buying a house than worrying over busy roads, how old it is (actually older houses were built better than the newer ones now) or trying to figure out how to do comps with waterfront vs non-waterfront. Even an agent isn't going to be able to help you with that, you'll need great contingencies in your offer for that one ;-)

Last - but not least, real estate value is determined by what a buyer will pay a seller in an open market. You can not second guess what an appraiser would say - that is the mtg company's job to do because they want to protect their collateral. The best you can do is get a professional on our side, put some great contengencies in your offfer to protect you, shorten the time frame for acceptance, and take your chances.

This is a gamble, not a game, and you need someone on YOUR side that is a professional to help you. Get an exclusive buyers agent, would be my recommendation. If you need a recommendation, get in touch with me. I don't work in your area, but if you are real stuck on this area, I can tell you who to get in touch with if I were trying to do what you are.

Lisa, thanks again for answering my question. I was not trying to sling mud at the entire Realtor industry. I guess it may have come across that way. I have been burned by a broker (not in the DAB area) who was not a member of the MLS, and had an exclusive listing that I ultimately ended up buying as a cash transaction. The broker, and the house, both looked good on the surface, but upon closer examination were something I should have ran hard and fast from. Live & Learn! I am trying! LOL

Anyway, I know appraisers are not going to help me, so I imagine a Realtor is my best resourse. I have access to the tax rolls, but there again, that won't tell me if the house has been remodeled, or if it needed repairs when sold. I have been watching the market over there for over a year now, and I know what you are saying. They sit on the market here too unless they are priced well below value - or what the percieved value is.

I do have a question based on your answer. What happens to the sale of a home if the contract contains an appraisal contingency, it appraises out at the agreed selling price, then the bank loweres the appraisal? How much more (% + time) do you personally think the market in the DAB area or Fl in general will correct before it becomes stable or begins to show increases? Also, what do you think will happen with the tax reform & do you think it will help if passed?

Robbyn, I think you'll find very few REALTORS are doing business the way you just described. I've been a REALTOR in this area for almost 8 years so I know most of my competition. I'd say maybe 10% of them will try the shady stuff you described. The one's that do try to do business in an unprofessional manner, such as you described, can be reported to the local REALTOR Association. In this market, they won't get away with it anyway. My last 5 sales (both listing and buying sides) have been houses and condos that were priced well below the competition. Nothing else is moving at all.

As for the appraisers, you are correct. The banks instruct the appraiser to try to get the value close to the contract price. But if you hire one on your own, without telling them the contract price, they're going to give you the highest and best value. I'm not sure if an appraiser will do this or not, but REALTORS are going to look at active listings as well as closed sales, to get a good overall picture. And recently, banks have actually been adjusting the appraised values downward! It doesn't matter what the appraisal says. If the bank believes the market is going to correct some more, they're not going to loan the money.

Last but not least, in Florida, 95% of all brokerages are only working as Transaction Brokers. TB is the representation that replaced Dual Agency when it was banned. They're not even offering Single Agency anymore. (That's a whole other story in itself. I have a blog about it on my web site.) If you don't want to use a REALTOR or an appraiser, that leaves you with digging through the tax rolls. Or you could try a web site that has the sale prices posted, but a couple of them are allowing the public to input the data, so be sure you verify it against the tax assessors site.

True value is only what someone is willing to pay for something. To determine what a "fair" price is, a comparative analysis being done by a good realtor or a professional appraiser can tell you pretty closely what like properties are selling for in your area. You can do an internet search, too, but most good realtors will be happy to provide you the service of a competent comparative market analysis--our company requires we do one as part of representing a party in a real estate transaction.

The true value is what you are willing to pay for it. Sometimes people use "comps" to compare value but never under estimate the perceived power of "super cool" or "distressed property" infuence.

If you aren't an expert investor, try working with a broker with a large property management business. They know how to help...

Lisa, Thank yo ufor your prompt reply answer! It is in Ormond 32174. I hear APPRAISERS are just confirming to the lender that a property is worth what is selling for, basically nothing more than a paid 3rd party that don't even have as much access to info and knowledge as brokers or realtors. No offence, but don't a realtor have a vested interest overall in selling a property at the highest possible price? In reality, they make their $ from commission on that particular sale, and if they keep the market high, make more $ off every sale. I am not opposed to using a BUYERS AGENT, but, I would want one that is honest and has MY best interst at heart, not the bank, the other realtor or the seller. I think it is listed too high because of the proxcimity to the main road, and also the "origional" condition. In spite of the fact that the seller maintained it the home is so definately outdated, it is like a step back in time. New windows cost a mint, as does a new kitchen, and each bathroom costs a lot as well. The "groovy" wallpaper and flooring have to be accounted for as well. How can I factor all of this into an offer when I have no idea what condition the other sold homes were in?

Without knowing the exact town, it's impossible to determine value. In the Daytona Beach area the values vary drastically when you drive just 5 miles up or down the coast. The best way I can recommend is to have an appraisal, AND have a REALTOR do a market analysis for you. Do not tell either of them what the findings are of the other one. I say this because in the last couple of days, I've been having a discussion on my blog about the drastically different values that have been found by REALTORS and appraisers. Appraisers are finding the highest and best value of a property. But REALTORS are trying to find the true market value, IE what a buyer will pay.

If you're trying to do this yourself, you'll need to go through the tax rolls for that area and find what similar properties have been selling for, within a 2 mile radius. If there are enough comparable sales, try to stay within the last 3-4 months (since the lenders started circling the drain). Property values were quite a bit higher before that.

Of course, I can only speak with certainty about this area.