Your Distressed Property and Short Sale Expert in Maryland
Wanted to pass along this very informative item by a leading appraiser in Frederick County, Maryland. An in-the-trenches opinion. Valuable for helping others understand pricing.
Posted on Jan 03, 2011 in Real Estate by WSix
2010 was not a good year for most real estate related professions. Our appraisal volume was down and the amount of work that needs to be put into each appraisal assignment has dramatically increased. Appraisals now have multiple reviews with each reviewer/underwriter wanting more comps, more explanations and more justification of values.
As of 9/1/2010, all appraisals being sold to FNMA require interior photos including a photo of every bathroom. It seems like the underwriters don't trust us anymore. Underwriters have an option of getting an appraisal reviewed by another appraiser if they don't feel comfortable with the value. One of our lenders told me approximately 70% of their appraisals require a review. Often it is a last minute decision. We are seeing a lot of this as I am currently doing a lot of reviews.
It seems as if we complete an appraisal, don't hear anything for 3-4 weeks, and then the day before settlement, we get a call that the underwriter needs more comps and we need to address this and that "ticky-tack" item. Over-regulation to the point where it makes no sense.
Lots of revisions are requested at the 11th hour. It makes it difficult not only on appraisers but also on REALTORS®. I'm sure the REALTORS® and loan officers have been seeing their loans become tougher and tougher to get approved. So how does 2010 relate to other years in the past? It's financially the worst year I've had in over 20 years. Numbers don't lie.
The market has been very tough. Prices on the upper end are still declining. There is relatively little comparable data available and prices are scattered all over the place. In many neighborhoods, there are two values. You get two distinct sets of numbers depending on whether the comps you use are foreclosure sales(and short sales) or arms- length transactions.
I am frequently startled by how cheap prices are at the present time. When we get in an appraisal that is a sale, I like to go look at the house, work up the appraisal and not look at the sales price until I am nearing the end of the appraisal report. When I look at what the sales price is, sometimes it's just amazing. I'm sure you are seeing the same thing. It seems that the ones that are selling are selling for a very reasonable price. The good news is that this storm of decline has been here for 5 ½ years now.
Although I do not see much light at the end of the tunnel for 2011, the sun is coming back out sometime. .
Editor's Note: Local Housing Statistics are available at http://www.rbintel.com/statistics/frederick-county-md
Dennis
www.MarylandDistressedProperties.com
www.Frederick-MontgomeryCountyHomes.com
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