A Lender’s Appraisal Does Not Care About Your Upgrades

Real Estate Broker/Owner with Steve Moore/David Massey Real Estate

Thanks Tony.

Do you feel that pricing a home is a little like throwing darts these days? Sometimes you hit, most times you miss?

At the end of the day Realtors have a next to impossible job trying to help clients price their home. I don't think I ever met anyone that wants to lose money but most homes we price today should reflect a lower price than a few years ago. Now I'm on the mortgage side of things but I hear the same things. My house is worth XXX,XXX due to:

"I have nicer landscaping."

"I just replaced the carpets."

"I just repainted the walls."

"I just had the bathroom toilet fixed."

"I had my furnace replaced last year."

Realtors work very hard with comparables, pictures and stats to help support the price. I'm not saying that these upgrades are not important. They just don't really add value. They add eye and curb appeal to help a potential client say yes to the listing.

What goes into a Lender's Appraisal?

For Fannie Mae, Click here

For Freddie Mac, Click here

For FHA, Click here

Most homes are financed. So these appraisal standards are important when you price. Remember we are in a Lender's Market. Nothing will turn a buyer off more than working hard on a price agreement only to find out the appraisal comes in short. So to best serve our clients remember that most of the weight for your pricing strategy must be Lender comps.


At your service,
Tony Grego
Senior Mortgage Banker  American Bank - Indianapolis, IN Branch
www.tonygrego.com to learn more about me

317-348-0280 direct line
317-536-3754 fax
"Bankers with vision, helping people with dreams!"


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Terri Onigkeit
Keller Williams of Northern Colorado - Fort Collins, CO

I agree, and trying to tell your sellers it does not ad value? They don't want to believe you.

Feb 27, 2010 08:59 AM #1
Robin Rogers
Robin Rogers, Silverbridge Realty, San Antonio, Texas - San Antonio, TX
CRS, ABR, MRP - Real Estate Investment Adviser

Thanks for reblogging this, Steve. I'll check out Tony's links.



Feb 27, 2010 09:05 AM #2
Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv
REISA - 317-663-4173 - Indianapolis, IN

Thanks for the re=blog and spreading the message


Feb 28, 2010 08:17 PM #3
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