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Just what we don't need

By
Industry Observer with WideOpen Networks 250784

Evening on the beachIt has been a very busy week here on the NC coast.  The weather through Thursday was fantastic.

It even got up to 80 degrees Fahrenheit over on beach on November 1.

That with a combination of Hurricane Noel about three hundred miles off shore brought some great waves to the beach and lots of surfers

We have also had a mini-burst of people interested in coastal property.  With weather like this, if you happen to be in the area, it is hard not to fall in love with our beaches.

While the weather has been good, the real estate challenges still seem to keep coming out of the woodwork.  I had a lot sold and awaiting appraisal.  The appraisal that we got back knocked my socks off.  It was far lower than a much less desirable lot which sold in July of this year in the same neighborhood.  The buyers agent was also floored.  Nice lots in water access communities have remained fairly strong even during the downturn.

I was having a hard time figuring this out until I saw this article, "Appraisers pressured to inflate subprime mortgage values."  The NY State attorney general is bringing a lawsuit against a company that he claims inflated values and colluded with a mortgage company.

Well I guess if I were an appraiser that kind of high profile law suit would keep me looking over my shoulder.

It just adds to the challenge of financing a property.  We have also heard of banks backing out of certain developments because they feel that they already have enough loans in those areas.

On top of that I had some clients who had traveled from the middle of the country to look for a new home.  We actually found them something that they really liked within their budget.  It turned out to be a foreclosure.

After four days of negotiating, they have headed back home.  We had gotten to within about 1% on price with the closing date still to be ironed out, and the communications from the bank (seller) stopped.  My clients had extended their trip three days to our area just to be around so they could do a timely official offer.

I am a little amazed at how difficult it was in dealing with the foreclosure.  It was not even listed in our county MLS.   We just happened to see it driving around.  I finally got a MLS listing from another county which had several errors on it including having the property in flood zone when it isn't. While the listing had the property with one appliance, it was actually missing.

The information the bank wanted before we could submit a formal written offer certainly did not give them the kind of information that a regular buyer would have found very valuable in making a decision on whether or not to take an offer.  The biggest factor they were ignoring was that my buyer was going to put down close to 30% cash so a mortgage was going to be pretty easy.

For months our problem has been not having buyers around.  Now I think we just need buyers with heaps of patience and some extra money since we now have gun shy appraisers, cautious lenders and some sellers that move like they have molasses in their veins.

 

Comments (2)

Vincent McKamy
Samson Properties - Fredericksburg, VA
Realtor Fredericksburg Virginia

 

I read the article about the law suit and I can see why they are a little gun shy.  I would be if I was in that business - but, like any business if you do your work you shouldn't have anything to worry about.  I wish you luck with your transactions.

Nov 03, 2007 03:27 AM
Sara Goodwin
Estimation Nation Corporation - Portland, OR
Portland, Oregon Appraiser
Hi David - I saw the title of your post and got my defensive hat on... and then I read it - You were pretty lenient on us Appraisers and I appreciate your understanding.  Here is a post that I wrote a bit ago about some of the new stipulations that Lenders are coming up with for Appraisers.  It seems to get crazier every day.
Nov 12, 2007 03:04 AM