Market Conditions in 94605>Question Details

Tracy Mullig…, Home Buyer in 94610

I recently purchased a nicely remodeled home in Millsmont section of Oakland for 379,000. It appraised at

Asked by Tracy Mulligan, 94610 Wed Jan 7, 2009

330,000. While my financing is not affected as i have a large down payment, this is still a little disturbing. I welcome any input! thank you

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Cfx@ucla.edu

Tracy,

Hi. This is frustrating and unfortunately it is not uncommon to see these days. There are signs that the market is changing due to lower interest rates and with prices so low now, there is definitely more movement in the marketplace. When markets are in the process of changing often times you will see that appraisals do not always reflect the value of home to a buyer. Keep in mind that appraisers are using historical data, and with many areas affected by an increase in foreclosures, these properties that are often distressed, have a negative affect on the values of other homes located in the area. I actually live in Maxwell Park, and area not far from Millsmont, the same has occurred here as well.

As long as you are looking to stay in your home for a period of time, I do believe you will see an increase in value. If you look at the value of Real Estate over time in the Bay Area, there is an intrinsic long term return of your investment.

Good luck in your new home and welcome to the area!

Lisa Cartolano
Alain Pinel Realtors
0 votes Thank Flag Link Wed Jan 7, 2009
Hi Tracy,

I would not typically recommend to a client to purchase a home for a higher price than its appraised value, that being said, It sounds to me like you are happy with your home purchase and to that I say Congratulations! It can be difficult to find just the right house and when you do, its important to play it smart so that you dont get caught up in the excitement and love of the house to the point that you over pay. $379 for your dream home sounds like a pretty good deal to me:) So try not to get hung up in all the downer information on the news and the negetive nellies out there. If you are planning to live in your home for at least 5-10 years, you should come out on top.
All the best~
1 vote Thank Flag Link Fri Jan 9, 2009
Tracy,

First and foremost YOU are NOT ENTITLED!!!
http://www.msnbc.msn.com/id/27648884/

Second, any person who calls himself or herself a real estate agent and who has been in the biz for less than 10 years has to go by his or her true title, "huckster".

Some of the responses here are on the verge of cutting edge ignorance.

Here is the real story:

Same bus, second shift!
http://www.cbsnews.com/video/watch/?id=4668112n

FHA-backed loans: the next subprime crisis?
http://www.msnbc.msn.com/id/27844894/

Half of 'rescued' borrowers still default
http://money.cnn.com/2008/12/08/news/economy/mortgage_summit…

Remember! the sun doesn't shine when you're under the bus!!!
http://www.ireport.com/docs/DOC-33467
0 votes Thank Flag Link Thu Jan 8, 2009
A couple of the later answers question why I would purchase a house that appraised so much lower than what I paid. A few more relevant details: appraisal was done as part of financing, so yes at the same time as purchase of home. It was VERY clear during the negotiations on the original price that the owners could not and would not negotiate down below our agreed upon 379,000. They said they would rent the house if needed and move out to a cheaper place. They negotiated the realtors' commission down to 2.5%.
So, Cindi, my agent made it very clear that there was not going to be any negotiation with the seller.
I bought the house because I love it, I feel it is a good deal for what it is regardless of appraisal (which is based on comps within 90 days and heavily weighted with foreclosures), and I have been looking for 7 months and bid much more than this on similar places without getting them.
0 votes Thank Flag Link Wed Jan 7, 2009
Unfortunately, that is the nature of this market and I have heard that story numerous times in the past couple of months. I wouldn't worry to much if you are planning on holding onto the property for at least 5 years. I believe the market will stabilize at the end of this year and we will see prices going back up in 2010. Just sit back and try not to get to wrapped up in all the hype. Easy said then done...right. Hang in there!
0 votes Thank Flag Link Wed Jan 7, 2009
Why would you purchase a homne with such a difference in the sales price and appraised value? If I would have been representing you, I would have attempted to negotiate a sales price comparable to the appraisal.
Web Reference: http://www.cindihagley.com
0 votes Thank Flag Link Wed Jan 7, 2009
The Hagley G…, Real Estate Pro in Pleasanton, CA
MVP'08
Contact
If you purchased home $379K did the lender appraisal ONLY value $330K , banks wont lend money on homes that are over valued. Now if you purchased a home OVER appraised value that is fault of home buyer .

OR are you stating your home has decreased in value since you purchased your home? That is same with other home buyers across the country home values have decreased due to number of foreclosures.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Wed Jan 7, 2009
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