Unfair appraisals

By
Real Estate Agent with Keller Williams Atlanta Metro East 230739

I totally agree with the centralization of appraisers as independent entities.  Banks, brokers, agents, and homeowners had too much influence over appraisers especially the ones in which you sent repeat business.  The problem now is since banks have to pick appraisers from a pool, they dont know how capable these people are at determining value.  Many of the appraisers dont live in the areas they will now be asked to appraise.  I had a client who found a 3/2 ranch totally renovated into brand new condition in Conyers.  The appraisal was tied up for two months bc the only things which sold in the subdivision were forclosures for 30 -50k.  Since there were no non distressed sales comps in the subdivision, the banks argued that 30-50 k was the market value for the area.  Where in this country can you buy a new home for 90k.  The common sense approach was lost and the deal almost died.  Agents, thankfully the mortgage broker found an investor who didnt need the comps and the deal was done.  Banks have to stop looking at forclosures as comps to non distressed properties, they are not like kind.  Many of the homeowners in the subdivision are faithfully sitting on and paying mortgages from 130-150.  Banks should be able to look at current first mortgage data in order to truly ascertain market value, no matter how far back, you should be able to see a trend with a slight dip attributed to forclosures. The 3-6 month comp rule banks are using will only lead to upside down owners walking away from homes they have no hope of breaking even.

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appraisals
market value
forclosures
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Ambassador
1,241,628
Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

What are you going to do?

Foreclosures and short sales set the comps.  You can't really filter those out when doing appraisals.

Sep 11, 2009 02:10 AM #1
Rainmaker
317,567
Susan Brown
Keller Williams NE, Kingwood Texas (Humble & Atascocita too) - Kingwood, TX

It's a rocky road with appraisals.  We've had some come in without any issues and others come in under selling price for comps to unlike properties.  We use like properties for our listing prices - the appraisers should be on the same page.

Sep 11, 2009 02:10 AM #2
Rainmaker
1,551,102
Gary L. Waters Broker Associate, Bucci Realty
Bucci Realty, Inc. - Melbourne, FL
Fifteen Years Experience in Brevard County

Distressed properties are the predominant comps available thus the current values with adjustments for condition/updates.

Sep 11, 2009 02:14 AM #3
Rainer
3,901
Joseph Griffin MBA, CBB, CCB
Keller Williams Atlanta Metro East - Conyers, GA
Digging for Real Estate Gold in Atlanta Today!!!

In a subdivision with 300 homes, and 30 have gone into forclosure in the past year and 1 was a normal sale, what about the other 269 homeowners paying on time. Maybe these 30 people had interest only, adjustable, or no doc loans and the economy has finally caught them.  Maybe the tax records could be used more to see the owners who are currently paying mortgages.

Sep 11, 2009 02:20 AM #4
Rainer
3,901
Joseph Griffin MBA, CBB, CCB
Keller Williams Atlanta Metro East - Conyers, GA
Digging for Real Estate Gold in Atlanta Today!!!

Can or will appraisers use the cost approach or replacement value to justify value in this market?

Sep 11, 2009 02:21 AM #5
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Rainer
3,901

Joseph Griffin MBA, CBB, CCB

Digging for Real Estate Gold in Atlanta Today!!!
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