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Home Selling in 93703 : Real Estate Advice

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  • Home Buying1
  • Home Selling7
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Activity 7
Sat Apr 16, 2016
One_beachlvr answered:
Appraisers are busting deals right and left here in Texas. The problem with the difference in square footage is that they don't usually go in and measure the other houses that they are using as comps so it is not "apples to apples"; they use the listed square footage on the comps and their measured square footage on the subject property so any adjustments they make are always going to be questionable but not changeable. Additionally, they go back too far in quickly appreciating markets rather than look at other similar neighborhoods for more recent sales and that often brings down appraisal values as well. Sadly, while market value in it's simplest form is "what the market will bear", appraisers have a lot more rules and are held to a more conservative standard because at the end of the day, their job is to protect lenders from ending up with over-leveraged houses when buyers default. They are not held to any accountability in the transaction as they have no skin in the game and they are considered the expert regardless of the numbers so sadly, it's very difficult to get around a bad appraisal. If you care enough to maintain a record of these low appraisals and then go back and see what the homes actually sold for, maybe a body of evidence large enough to make a change could be collected but I doubt anyone in this industry has the time to do that! ... more
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Sun Aug 4, 2013
Terri Armstrong answered:
I appraised a house last week --county records showed 4 bedrooms, 2car garage. 2,140 sqft MLS --3 bedrooms 3 car garage. 2,140. My measurements 3bd 3 car garage house 2,000 sqft. The additional sqft was in the garage not the living area. I made detailed notes in the report about my measurements.

A two story home can be off too. The stair case, open areas, etc - which can be difficult to measure.

I am not making excuses for the appraiser--it is very important to get things right. It appears that the difference in sqft did not cause a problem. If you have concerns contact the appraiser for more information. The appraiser's work file will have the sketch and measurements.

Also, read the report for comments on sqft.

I replaced my measuring tape years ago with a laser --sure helps in measuring those hard to reach spaces . The laser is connected to my iPad with an app that draws out the plan. I make sure everything is correct before leaving the property.
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Mon Aug 29, 2011
The Medford Team answered:
Q: If you get locked in on a crooked Appraisal (FHA) & you go into Escrow with his crooked appraisal can you still file a complaint with the State on him
A: Yes

Q: This guy delibertly manuplated the values & facts to come in at a much lower amount.
A: How did he do that? Did he make a mistake with the square footage? Did he use the wrong number of bedrooms? Did he use similar homes to yours for comps? Did he go outside the 6 month time frame for comps? Did he go outside your neighborhood more than a mile and use homes that were not in any way like yours? What did he do to deliberately manipulate values?

Q: He is not fit to be an Appraiser and should have his license revolked.
A: What exactly did he do that was wrong?

Q: He has devastated me and I cannot get out for 90 days. I am forced due to the market to take his Appraisal.
A: Does that mean you need to sell and are being forced to complete the transaction at the lower price? Is he the one who is devastating you or is it the market that is providing the devastation?

Q: He put a very nice home down to foreclosed prices.
A: If the only comps on the market are foreclosed homes, then those are the real comps. There was a day when foreclosures were NOT used as comps, but those days are gone. In reality, in many communities foreclosed homes represent the actual market values because they are the predominate homes on the market. You may not like it, but it is the reality of the current market. And it’s not just affecting you – it is affecting ALL of us. Also, there are some very nice homes that have been foreclosed. Not all foreclosed homes are “distressed” – just because a home was foreclosed does not mean it is an inferior home or is priced less than market value.

Q: Can I still file a complaint with the State Appraisal Office if I go into Escrow & take his crooked appraisal amount?
A: Yes – but I’m not sure it will do anything.

Q: He needs to be stopped before he does this to some other poor old person?
A: Low appraisals are happening all the time – there are a number of reasons for this, including HVCC. The hardest thing for those who have lived in their homes for years to accept is that the value that was once there is now gone. I run into this all the time. We are in a severely depressed market and, no matter how nice your home may be, or how much sweat and love you’ve put into it over the years, it will not be worth any more than the comparable values of homes around you – regardless if they are normal sales, short sales or foreclosures. It’s just the way it is, unfortunately.
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Sat Aug 27, 2011
Justin Ruzicka answered:
It doesn't sound like a functional room to me either. But more importantly don't you love how the Government is making it difficult for you to sell your house? It is so frustrating that FHA (a GSE) of great old America is creating all these road blocks in one of the largest private sector industries out there...UGH.

best of luck
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Wed Aug 24, 2011
Lisa Reeves answered:
It really depends on what the buyer is asking for. If they at trying to get a reduction on the contract price ask to see the appraisal. If the comparables are wrong the buyer has the following options: pay the difference out of pocket, get a new lender and new appraisal, or walk away. I have had buyers pay 70k out of pocket and I have had them walk over 5k. If you have doubts ask the other agent straight - is your buyer thinking if walking away. They should tell you honestly yes or no. ... more
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Mon Aug 22, 2011
The Medford Team answered:

The irony here is that the real estate market is driven by consumers, not the banks. It’s basic supply and demand economics. When REOs first started coming on the market in floods, they were at the current market pricing or a tiny bit below.

Problem #1. No one was buying them. In fact, no one was buying much of anything. So banks lowered the prices until they started to sell.

Problem #2: There was far more inventory than available buyers, so the prices continued to fall. Not because the banks wanted to lower prices or because they were trying to dump properties at substantially discounted rates or because of the amount they were able to get reimbursed by various government agencies … but because that’s the price consumers were willing to pay.

Problem #3: As pointed out by Ron, many of these properties were significantly damaged and had to be discounted. I’ve seen some pretty nasty places over the past few years.

This is important: When a property is appraised for ANY reason, the financial factors behind the scenes are not a party to the appraised price or appraisal process. The condition of the subject house in relationship to other local comparative sales is what actually determines the price.

As an example, a person who has managed to pay off their house and owes nothing will get an appraisal at market value. Let’s say that right next door is an identical short sale that is upside down by $250,000. The appraiser will appraise it for the same price as the home that is paid off. As a final argument, let’s assume that a nasty REO came on the market right across the street – the exact same model as the other two homes, yet trashed inside. The appraiser will use the values of the first two houses and then subtract for the condition of the REO. It will be therefore be priced LESS … not because of its status as an REO but because of its condition.

Let’s say the base market price for all three homes is $300,000. The irony of the above situation is this:

• Because the first house is owned by a normal seller who has an inflated idea of their homes’ worth, it will go on the market at $330,000. And sit there until the price drops to reality.
• Because the short sale listing agent needs to get an offer in a hurry, the short sale house will go on the market for $270,000. It will get multiple offers within a week – most likely at over the asking price, and then sit there for 6 months, have its price adjusted up by the bank and finally sell for $292,000.
• Because the REO is trashed, it will go on the market for $285,000. It will languish a month or so until the bank lowers the price, at which point someone will come along and lowball the price. Because it will have been on the market over 60 days AND it is in poor condition, the bank will be motivated to get it out the door and will accept $260,000. At the end of the day, it will actually sell for a price that is commensurate to its condition because it will take at least $40,000 to get it back into good condition.
• In the meantime, the normal seller is griping and complaining about the effect of REOs on his price, not realizing that if he had set his price correctly at $295,000 out the gate, he’d have sold a long time ago – might have actually received multiple offers driving his price over the $300,000 benchmark. He would have sold BEFORE the short sale or the REO – and his sold price would have set the benchmark for the other two – NOT, as usually happens, the other way around.

In reality, none of them were priced right at the beginning, and it has NOTHING to do with the conditions you’ve stated in your question.

In reality, this is very typical, and, when the day is done, it’s not the banks ruining the market. Their properties are being trashed by owners angry with their situation who are deliberately either destroying equity or blatantly stealing (frequently entire kitchens) – and not getting prosecuted for their theft.

So who IS ruining the market? How about normal sellers with artificially high expectations or short sales where the investors behind the loan are actually taking it in the shorts? Short sales hang out on the market for VERY long periods of time with pending prices that are, in many cases, absurdly low. In most cases, the short sale prices get adjusted upwards closer to reality once a bank does a BPO. But buyers, seeing the ridiculous list prices out there for so long, assume that’s the price at which it will sell and make their offers for other properties in line with the artificially low “fake” short sale list prices.

So who is REALLY driving the market down?
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Sat Aug 20, 2011
Ron Thomas answered:
How an Appraisal is made:
Visualize a series of COLUMNS, probably 4 or 5;
The First Column is the SUBJECT HOUSE and the others are COMP's.
Down the page we list FEATURES or FACTORS; such as # Bedrooms, # Baths, House Sqft, Lot Sqft, Fireplace, Pool, Roof, Garage, Fencing. Got it?
Now, in each box created, there will be a VALUE: Lets say the subject house is 915 sqft it would get --- or 0. And the first Comp house has 2500 sqft, it might get -100,000; which means that the house is WORTH $100,000 more because of the square-footage. (It is a negative number because the Selling price of that Comp house was approximately $100,000 more BECAUSE of the square footage and we have to deduct that $100,000 to bring them to equity.) Got it?

Now, lets say that the Subject house has $5,000 worth of new fencing and the Comp house has 25 year old OK fencing.: Then the SUBJECT house would get +5,000 and the Comp. house would get --- or 0.

When you go down the page, and enter everything, you get total Comparative Values on the two houses, which allows for the DIFFERENCES.

The two houses DO NOT have to be literally COMPARABLE, they MAKE then comparable with the VALUES.

So the house next door is larger, so what? They made up for that with the values.

Now, if you understand what I just did, then you will understand why;
1.) Two Appraisals can come so close together, and,
2.) Why the Bank will not listen to you about the results.

and in fact I will give you a third;

3.) If you hire your own Appraiser, he will end up with about the same numbers!

Also, please do not compare/equate the ASSESSMENT with the APPRAISAL: The ASSESSMENT is based on the LAST SELLING PRICE OF THE PROPERTY which might be last year. five years ago, or thirty years ago.

I hope I've helped.

Good luck and may God bless
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