Recently, I received an email from a friend who purchased a home 5 years ago from us:
"We are finishing up on refinancing our home. Late last week I met up with a lady that did our home appraisal. The end result is that our home value is now appraised at $165,000. I guess the remodeling of our kitchen and basement must have made a difference. As I recall, 5 years ago, we appraised at just a little over 140k."
Here's our response:
Don't get too excited about a financial institution doing an appraisal on a refi. The banks are in business to loan money and the more equity you have the more likely they think you will take a home equity loan out. This gets lots of people in trouble. We have had clients truly believe that they have equity that they really do not and borrow against it. Only to call us then to sell and they owe thousands of dollars at closing. Market value doesnt mean appraised value. No one has made money the last year living in their house and the market is still going down. Sorry to burst your bubble but its just all facts. Having said all that I can do a market analysis on it and maybe it is worth that mucn. Equity is a funny thing...it doesn't exist unless you are borrowing our selling.
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