Market Conditions in Denver>Question Details

Cory Fitzsim…, Real Estate Pro in Golden, CO

How many agents are still having problems with appraisals?

Asked by Cory Fitzsimmons, Golden, CO Mon Mar 18, 2013

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2013 started with appraisal problems for me. This is the very first time in my 10 years in business! Comparable sales often are not catching up with rapidly rising home prices and appraisers do not have a monetary adjustment for this kind of environment. At the same time buyers are forced to offer above the asking price, trying to be the winning bid against other competing offers. It's a catch 22 and the sad result is - heartbroken buyers!

Marina Bay
Cherry Creek Properties
2 votes Thank Flag Link Mon Mar 18, 2013
If you cannot see it I am raising my hand!! Fortunately not that bad here.
1 vote Thank Flag Link Wed Mar 20, 2013
In rapidly appreciating markets, it can be difficult for appraisers to keep their values level with the market. Their valuation is based on past sales which reflect yesterday's values. Even if the appraiser can measure the market appreciation rates, lenders do not want to see these adjustments on the appraisal. This can severely tie the hands of the appraiser and is a source of problems between buyers and sellers.

In these types of markets, buyers may need to hold back some of the down payment monies in case the appraisal does not meet the purchase price. This does not mean the that the property is overvalued but rather that the market is requiring that buyers, rather than lenders, fund the increases in market prices. In the end, this will create a much more stable real estate environment.
1 vote Thank Flag Link Wed Mar 20, 2013
the apraisals do seem a little low lately because they are taking the last 6 to 12 months sales as comparables.. the market has been tight lately so driving the prices up... we put an offer for a fair price and the appraisal came 20K lower.. my client couldn't get access to the extra mortgage needed... they didn't have 20k extra in cash, the Seller didn;t want to sell for 20K less than the contract...even though we told the Seller that the appraisal will stick with them for the next 4 to 6 months!
So FYI for future transactions!
thanks
1 vote Thank Flag Link Tue Mar 19, 2013
What's the best approach to an appraisal for a large property that has no comps nearby that are any where close to the amenities on the large property? We have 3 acres with a huge shop and a 4000 sq ft home with many nice features including a western view of the mtns., huge deck, spa, etc. Our home appraised about 80,000 than our current loan. We were going to refi. Any advise?
Dawn- http://www.homestateproperty.com Fort Collins
Flag Fri Mar 29, 2013
So far this year I haven't had any problems...dealing with houses and condo in the Central Denver market. Hope that continues through the rest of the year!

Bill Pearson GRI, SRES |"Your Denver Realtor For Life"
ERA Herman Group Real Estate| 201 Columbine Street| Suite 301| Denver CO 80206
720-329-1470 |Bill@DenverRealtorForLife.com
5280 Magazine FIVE STAR Real Estate Professional – 2010, 2011, 2012
1 vote Thank Flag Link Mon Mar 18, 2013
Denver metro area houses - no problem. Condos - still a bit of a struggle.
1 vote Thank Flag Link Mon Mar 18, 2013
It has been about 30% of the time I have been running into problems.
1 vote Thank Flag Link Mon Mar 18, 2013
Mountain/foothill homes, yes; city, no.
1 vote Thank Flag Link Mon Mar 18, 2013
We haven't had any problems at all with several single family homes recently. All have been in central Denver.

If anyone needs a good, realistic evaluation of their home - or if you're in the market - feel free to give us a call or email any time!

Info@TKHRealty
720-427-4836
1 vote Thank Flag Link Mon Mar 18, 2013
Had 2 condos not appraise last week. Both undet $150K
1 vote Thank Flag Link Mon Mar 18, 2013
Cory,

In Denver I am seeing less problems with low appraisals. Last week I wrote an offer on bank owned home listed at $128,000 for $155,000 that had 60 offers and a bidding war. After getting getting accepted after a 'highest and best' request, the bank countered at $156,000. The conventional appraisal came in at $156,000. I am seeing this happening all the time lately. On the other hand I wrote an offer for $175,000 for a builder's lot in Erie to have a custom home built. the appraisal came in at $150,000 and we are having real issues trying to move forward. Suburban appraisals are not coming up to value as much as Denver.


Robert McGuire ASR
Realtor/Consultant
Your Castle Real Estate
Direct - 303-669-1246
http://about.me/robertmcguire33
0 votes Thank Flag Link Fri Mar 22, 2013
Thanks for all the answers. I appreciate all those that contributed. Many consumers are unaware of this and the "system" currently in place. I understand it is our job to responsibly price a property but there are other variables we cannot control and are making it hard for our market to move up. Awarenenss is key...
0 votes Thank Flag Link Tue Mar 19, 2013
I am assuming you are a Realtor, I suggest you put your discussion into the blog section of Trulia for other Realtors to discuss their market situation concerning Appraisals with you....
Good Luck to you

Sincerely yours,
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and
Investors alike....And always with a SMILE :)

Covering for @Properties Chicago & suburbs, and with her trusted Partner
Agents US & world wide properties. French, German, some Spanish &more EdithSellsHomes@atproperties.com or EdithSellsHomes@gmail.com
Check out my website at http://tinyurl.com/YourRealtor4Life
Get to know me! Learn about my experience, expertise, services! Read letters
of recommendation! Sign up to search for properties in my expanded service area.
HAVE THE MOST WONDERFUL DAY :)
0 votes Thank Flag Link Mon Mar 18, 2013
Edith, Yes I am a realtor and this is a issue for consumers as well as agents. Were you going to contribute to the conversation?
Flag Mon Mar 18, 2013
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