How does the bank determine if a new home appraises for the sales price?

Asked by monte4, 10312 Mon Sep 9, 2013

Seems builders are slapping up nice cosmetic looking homes in the upper brackets that are taller & larger than traditional Island homes but on smaller lot parcels. What appraisal method are banks using to allocate value? Aren't comparables really un-comparable?

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Gail Gladsto…, Agent, 11743, NY
Mon Sep 9, 2013
Banks do not appraise, independent Appraisers do this.

When buildings/homes are not identical, there are certain adjustments that are made to on paper to make them comparable.
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Alex Levin, Agent, Staten Island, NY
Mon Sep 9, 2013
You have to compare a new construction to a new construction, or at least very close to it. In some cases Appraisers are allowed to go outside the regular radius to get it appraised. I sold a new development if Latourette at $525K when no other sale in the area was not even close to it.
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Tim Moore, Agent, Kitty Hawk, NC
Mon Sep 9, 2013
Comparables do not have to be identical to be used. A 1500 sq ft house is comparable to another 1500 sq ft house and you can use a 1800 or 1200 one and add or subtract to get a value. This is what appraisers and Realtors do, they find properties that are close and make adjustments. It won't be difficult after the first few sales go through and then it gets easier and easier.
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