Elizabeth Morse-Rhodes

I am a Certified Residential Appraiser and a Realtor. I appraise many homes for some 30 banks nationwide. Banks are favoring conservative appraisals. Lately I have been reviewing submitted comps from agents. This is typical. Good Appraisers welcome them. We are not out to wreck your deal. We are neutral and call it like it is. It may be hard to believe for some, but many of our appraisals today are coming in below the salesprice. Its because of the tightening standards for appraisals.

This is what you do. Have your agent provide a rebuttal to the appraisal. Your agent will need to submit comps to the appraiser. Have the appraiser comment on each of the submitted comps as to why they were not used. Remember, the appraiser can not ignore sales that are most recent. Banks really want comps that sold within 3 months instead of 6 months if they are available. We are now using foreclosures as comps if they are most recent. Appraisers will then make condition adjustments to those sales if they are in fair condition. We are also making negative time adjustments between 6 to 20% depending on the data the neighborhood shows. The older the comps, the larger the downward adjustment for time. Also another major factor . . . we are now deducting seller subsidies from the sales price.
Example: A house that sold for $325,000 with $15,000 closing help is really a sale price of $310,000.

Adding the omitted bath will only add between $3,000 to $4,500 to an appraisal for homes located in the Laurel area. That error would cut into the $15K shortchange.

You can not demand a second appraisal since the buyer technically pays for the appraisal and the bank owns it. The bank is probably going to have the appraisal reviewed by another appraiser anyway. The banks want this deal to go through if the house is really worth the price. The buyer's loan officer will see to that.

Once you go through all those steps and it doesn't help, you have a decision to make. Either lower the salesprice or let the buyer go. Two years ago buyers were willing to pay the difference from their pockets, but with this market, they won't do it.

If you would like me to take a look at the appraisal free of charge, I would be happy to. I appraise in the Laurel area. Maybe I'll find something that will help. I can be reached at EJMRhodes@aol.com or you can call my home office at 410-750-7014. :) - Thu May 22 2008, 19:51

Homes in this area are selling within 2 months to 3 months if they are priced correctly. Your home hasn't been on the market too long. I would ask your agent on what the feedback has been from buyers looking at your house. If they say it is overpriced, then think about lowering the price. Also, look at your competition. Ask your agent to take you on a tour of your competition. That is the best way to see what you are competing with. You will see their positives and negatives. I would wait another 2 weeks to see if you get any "bites". If you don't get any, then think about lowering your price or work with your agent on a better marketing campain. Good Luck! - Tue May 20 2008, 10:43

Yikes - that's bad. Your agent should have told you about that sale. Did she show you comps to make an offer? If so, it should have been in there. You may have a case. I would first confront her on this and find out why she didn't tell you about it. If you don't like the answer, contact the Maryland Real Estate Commision. You may have a case. Are you sure the other house is the same style, same square footage, and all amenities? If it is, there is no question, she ommitted this comp on purpose. Since you didn't use a bank, you didn't have an appraisal done. You should have paid the $400 to get one on your own. If you need a hired "gun" for an arbitration or court case, I'm here to help. I can also do an appraisal for you. I can be reached at ejmrhodes@aol.com Good Luck! - Mon May 12 2008, 16:25

Hi Brenda,

I grew up in the Catonsville area and know this area very well. Houses are selling if they are listed correctly. Homes priced right should sell within 2 months. If your house is already listed and has not sold, its probably priced too high. Market values are declining steadily. You don't want your house sitting on the market over 4 months. If there is any question on what the home should be priced at, you should pay for an appraisal. Market Analysis done by Realtors is just "fuzzy math". An appraisal will give dollart values to certain amenities your home may have. You want top dollar. If your house is listed, ask your agent to see all properties that have sold within the last 3 months. This is a requirement banks are now forcing. It use to be 6 months to a year. They have really tighten their loan standards. In may appraisal practice, I've seen most home values decrease around 8 to 10%. Every month that goes by, the property is decreasing in value. The problem could also be the Realtor. The Realtor may not be marketing and pricing correctly. This is the tricky market right now and sellers have too much to lose. I wouldn't list a property without an appraisal. An appraisal will also help justify your list price to low ball offers. I'm a Realtor and an Appraiser. If you want an appraisal, please feel free to contact me. I can also be hired as a Realtor and my appraiser credentials is free. If you have any quesitons, please give me call at 410-750-7014, ejmrhodes@aol.com, or you can reach me at my website a thttp:// www.marylandreopro.com.

Always a pleasure - Mon May 12 2008, 13:50

I am a Realtor and Certified Residential Appraiser. I get asked this question all the time. Good building lots in this part of Howard County are scarce. It all depends on the condition of the house and if there are any incurable functional obsolescenses. Here’s a checklist to see if the property will qualify for a teardown:

1. Condition and Structural issues.
2. Cost to Cure – Will the total cost to rehab the property cost more than the house would be worth if it were in good condition?
3. Functional Obsolescense – The floor plan is odd. Rooms inside of rooms, no hallways, one bathroom for 4 bedrooms, no closets, etc.
4. Quality of Construction – Asbestos shingle, brick or stone?
5. Location – Are there any upscale homes nearby? Property may attract a new construction buyer.
6. If the property could be subdivided, would the property be worth more?

Many of the older homes in the county have been razed for new construction. This is called the “Beverly Hills Syndrome” in the real estate business. Please remember that these older homes have a limited market. If the property sits on a great big piece of land, its probably going to attract developers. It’s always a good idea to pay for an appraisal if this situation arises or you can hire a Realtor with appraisal credentials like myself. If you have any questions on a particular property, I can be reached at my website. www.MarylandReoPro.com - Sat May 10 2008, 10:31