I really appreciate all the helpful advice already given. However, I need to clarify my situation.

Asked by Terryr, Toms River, NJ Fri Oct 7, 2011

My buyer is willing to pay my asking price. When a CMA is done, they fail to take into consideration that my home, in mint condition, has a spectacular water view, and a large lot. The bank also failed to include in their comparatives the home right next door, which both homes were built by my family and they are alike. That home sold last year for $350,000, $37,500 more than my selling price.

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Francesca Pa…, Agent, Manasquan, NJ
Fri Oct 7, 2011

All I can say is that i hear this so often about appaisals. Most recently I had a North Jersey appraiser try to appraise a property 1 block from the beach and he admitted the had no clue and was despareate for feedback from both the listing and selling agent since he was sooo wayy off.

You may want to try to order another appraisal at your expense, The unforutnate part of today's appraisal process is that in order to counter to problems of the upswing market, the government created a "pool" situation wherein realtors and lenders HAVE NO SAY as to the appaiser and call into a central area for an apraisal. Often we get someone who has no clue of the area. Unfortunately, there is no guarantee that this will not happen trhe 2nd time around, but it clearly apprears u r getting a raw deal.

Francesca Patrizio, Broker Sales Asociate, ePrio, SRES
Web Reference:  http://www.PatrizioRE.com
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The Ocean's…, Agent, Wall, NJ
Fri Oct 7, 2011

This is the exact problem that our market is facing as the much needed correction continues to forge on. Waterviews are relatively zero value. They are a selling feature that may create desire for your home over another in the eye of a potential buyer however monetarily speaking it has no dollar value at all. In regards to the home built next door by your family ... last year is a VERY long time ago in terms of bank appraisals. appraisers are required to start at 3 months back, if there is sufficent data in that period that is where the values is set.

In regards to the buyer's willingness to pay... that is irrelevant in the eyes of the bank. It is the bank investing the money and they are faced with approximately a 10 to 14% decrease in property value annually. With no signs of improvement. So the most recent comparables will only suffice. Now your agent should have prepared in negotiations for this and had your attorney insert a clause during attorney review that in the event the home did not appraise the buyer's could or would make up the difference in cash. That is realistic and has happened on multiple occaisions with closings I have been involved with in the last year. There are homes that carry intrinsic value, which based on what your saying about your proximity to the water and such, a buyer may very well be willing to compensate for. Good luck and if you need any help dont hesitate to look me up!
Web Reference:  http://OSMLS.com
1 vote
Jeanne Feeni…, Agent, Basking Ridge, NJ
Thu Oct 13, 2011
Francesca is right - the "pool" situation has changed the landscape signficantly. I had a similar situation where an out of area appraiser really botched the appraisal and it came in 10% below the sale price. All parties agreed it was way off - even the buyer. We joined forces and succeeded in getting a second appraisal and the deal stayed on track. But this goes back nearly 2 years now and the appraisal situation has become much more rigid in my estimation since then. I believe the "pool" was at its early stage when I ran into trouble.

There is no reason not to try - if you comps/analysis is sound, try to push back and see where it takes you. Get the support of your agent.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
Web Reference:  http://www.feenick.com
0 votes
Joan Congilo…, Agent, Freehold, NJ
Fri Oct 7, 2011
Hi Terry
Appraisors use pending and closed sales from the past 3 months when doing an appraisal. They will give you added value for major improvements such as remodeled kitchen and baths , additions, fireplace etc but not for cosmetic improvements. They expect homes to be in good to mint condition and the only time condition will affect the value is if your home is in disrepair.You can try to appeal it, but sometimes it can have a negative effect and actually come in at a lower value by a different appraisor. I have had that happen to clients in the past.
Web Reference:  http://www.joancongilose.com
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Gina Chirico, Agent, Fairfield, NJ
Fri Oct 7, 2011

As frustrating as it may be, the banks utilize the most recent sales for an appraisal (as should a real estate agent when doing a CMA) so last year's price for the house next door may not be the value of it in today's market. The fact that the buyer wants to pay asking price doesn't mean the bank will lend it to them if its unsupported by the appraisal. The buyer can pay the difference in cash - just not mortgage it.
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Anna Baran, Agent, Toms River, NJ
Fri Oct 7, 2011
Hi Terry, I understand your frustration. The bank appraiser can only optimally use the last approximately 3 months of closed properties in your immediate area. They review like homes with like homes in your area ( & if insufficient closed properties ,expand their search to the next neighborhood) & they do adjust for the differences. A spectacular waterview would not significantly impact the price unless it was waterfront. It would just make your home a more attractive purchase for the buyer versus looking out at another home. The home next door closed a year ago, therefore they cannot use an old closed sale in the current market. Unfortunately the market has depreciated in the past year. The buyer can increase their downpayment, you can reduce the price or come to a compromise. Just for clarification. The bank used a licensed appraiser who did an appraisal not a CMA which is done by the realtor, right? If the buyer is willing to pay your asking price, then what is the problem.
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Mary Robins, Agent, Wayne, PA
Fri Oct 7, 2011
Terry - you may want to look into the rules that appraisers must follow to prepare an appraisal in your area. In our area appraisers may not go further back than 6 months for a comparable sale, and 3 months or less is preferred since the market is constantly changing and most areas seem to be decreasing in value. That may be why the sale last year of the house next door was not used. You may also be able to find out what value a view has on a home in your area, which may be less than you were expecting.
Mary Robins, Keller Williams Realty
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James Flanag…, Agent, Toms River, NJ
Fri Oct 7, 2011

With all do respect; your buyers are borrowing 80% of the Market Value of your home, not your price. The home that sold last year is not comparable with your home if the closing date is longer than 6 months. And, as home values have been depreciating at the rate of 1% per month, it appears the bank's appraisal may be spot on?


Web Reference:  http://FlanaganRealty.com
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Tim Moore, Agent, Kitty Hawk, NC
Fri Oct 7, 2011
I assume you are having appraisal problems, but you mentioned a CMA which is similar in some ways. What exactly is your problem if the buyer will willing to pay your price? You mention the bank so I am back to assuming you have an appraisal problem. CMA's are normally done by real estate agents as a sort of poor mans appraisal. If you are having a problem with the banks appraisal then get the comps you want to use and offer them to the appraiser to look at. They will require them to be fairly recent and not 6 months or older. Appraisers are human and they can make mistakes.
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, ,
Fri Oct 7, 2011
Terry, A CMA is not important if you already have a buyer unless the buyer is paying all cash and not financing any of the purchase price. It is the appraisal that matters when financing is being used and the house next door should not be used as a comparable sale if there are other more recent comps. Hope this is helpful,
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