With some markets being hard hit, how are banks going about getting appraisals now for new loans?

Asked by Christina Moscinski, Saint Petersburg, FL Mon Mar 16, 2009

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, ,
Fri Mar 27, 2009
Christine, typically the buyer of the subject property is paying for the appraisal(s) if mortgage financing is required to help the buyer close the transaction. Can a second appraisal be ordered for justification? Yes, sure, I see no reason why it cannot be done.

If the seller is ordering and paying for an appraisal, a bank/lender will consider accepting it as long as the licensed appraiser is on their approved list of certified appraisers of residential real estate property.

Over the past year, upper bracket, $1million +, consistently required two appraisals to confirm and justify value. This especially if the LTV (loan to value) with financing exceed 75% for this type of higher end transaction.
1 vote
, ,
Thu Mar 26, 2009
Christine, banks like mine are getting appraisals by ordering appraisals from appraisers on our approved list; this to provide a professional, objective value to the real estate property. I can tell you that appraisers are working harder than before to write and deliver their appraisals so banks can provide a loan commitment toward financing a real estate transaction. The reasons include values being affected by large inventory of properties listed for sale, completed sales of distressed properties (short sales, foreclosures and etc) and of course declining market values in certain geographies. Sometimes upper bracket properties require more than one appraisal for reasons of a second opinion to justisy value.
1 vote
Christina Mo…, Agent, Saint Petersburg, FL
Fri Mar 27, 2009
Hi William,

So, do typically only the "upper bracket" homes get the "second opinion"? OR can the seller ask for two separate appraisal valuations & who would pay for the second one?

I have seen several heavily hit foreclosed market areas and nice regular homes for sale that are in those markets are really getting hit hard in loss of value due to it.

Just want Sellers to be aware of the justifications to price and offers and what to expect when selling in these markets.

Also, can the Seller get their own appraisal and will the bank accept it?

Thank you all for your responses!!
0 votes
Real Estate…, Agent, STATEN ISLAND, NY
Mon Mar 16, 2009
Christine,
from my experience here on Staten Island, NY appraisers gather information from the MLS and tax records to determine the most recent sale price, comparing that to to the same type, size and location properties then reducing that by oproximatly 5% because we are in a declining market.
Hope this answers your question.
0 votes
Marita Topmi…, Agent, Indianapolis, IN
Mon Mar 16, 2009
Hi Christine,

As always they call on trained, professional, licensed appraisers.
Or they used to until more and more AMC's owned by banks began cutting the pay appraisers get in half.
Oh, they'll still charge the buyer just as much as ever, but they'll pocket half the appraisers' fee.
Banks can barely be trusted to do what they are supposed to do.

My daughter is an appraiser. Her boss is a Review Appraiser - the trusted third party referree when
appraisers disagree. It's not easy in a market like this to define value. Appraisers are plotting
graphs in some markets where prices have gone into free fall. However, no one can see the bottom
until we hit. It takes a lot of time for a good Appraiser to do a good job.

We can know when the slide is slowing - that's when appraisals start coming in at close to sale price.

We are at that point here in the Indianapolis area - got here a few months ago. That's great news for
us, though our prices, both up and down, do not spike here as they do on the coasts and in resort
areas... Px Arizona area included.

There is a subcontext to your question that I responded emotionally to at the outset of my answer.
You and I are professionals. If the government came in and ordered us to work for half our wages,
we would lose our homes while trying to make up lost revenue, eventually abandoning all of our
years of training and experience to people who are happy to work for half because they don't have
the experience and won't put the necessary time into the work to produce reliable results. The
government is hurting the appraisers and will ultimately drive all the good ones out of business.
If that happens, values will again become indefinable, unreliable. Google: real estate appraisers
and see what comes up.

Hope that made sense,

Marita Topmiller
Broker/ Realtor
Indianapolis area
marita@maritatopmiller.com
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