Complaints On Appraisals

By
Real Estate Agent with Elite Home Sales Team OC BRE# 02066030
https://activerain.com/droplet/LJ9

Complaints On Appraisals

I was struck by and Article in The Orange County Register by Marilyn Kalfus titled Real Estate Appraisals Under Scrutiny.In the article is a complaint from a home owner early this year when all the homes were distressed property.Hers was a standard sale.

The homeowner explained how there was a difference in the distressed properties and hers that was upgraded.The appraisal came in low.The difficulty starts with the agents, homeowners, and press that do not understand appraisals.The agent stated the appraisals were hurting the market.Really?

Surprise, some agents state that the appraisals were lagging behind the property values.The appraisal must look at the market and state the value of the home at that point in time.If at that time there are only distressed properties selling then that is the market and the price used.

Why?Well let’s go back a few years ago and the market turned to the negative.Early in that market the prices were coming higher than the next sale.On the turn it is hard to get the price exact.But only when the market turns do you get the values skewed in the wrong direction.Back then the appraisals were looked at as hurting the lender and the buyer.Today it is the seller who is likely to have the complaint.

Yet two months ago I sold a property for $50,000 more than the last sale in the tract.We had multiple offers and there was no way the appraisal would come in.We did sell the property appraisal came in higher than thought and the buyer had to come in with some extra cash. We set the new value in the market someone has to.

The value of real estate depends on what a buyers and sellers are willing to negotiate (higher or lower) cumulatively it establishes the market value.Not an individual but the whole of the market.

The market has changed in our area. A lot of the agents has never been in a positive market. Many have never seen prices move up as fast as this and they have difficulty guessing on the value. We actually have been through hyper positive markets before. That means we have the ability to price where the homeowner will get the best price in the shortest amount of time.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Topic:
Lending / Financial
Location:
California Orange County San Clemente
Groups:
Everything California
Southern California Real Estate Forum
Almost Anything Goes
Dedicated Bloggers
Blogs Happen...
Tags:
appraisal

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
781,043
Nancy Frimann
Eagle Ridge Realty/Signature Homes & Estates - Gilroy, CA
California Real Estate Broker

What I have seen as a "rub" is when there is a normal sale, and it is compared to a short sale or foreclosure, ande it is in a newer development, it is usually the one that had 100% financing put on it.  The part that is bad is that most builders require some money up front for the upgrades (usually 50%), and since a lot of buyers who were doing 100% financing didn't have the money, they chose no upgrades.  Others, with money put up say, $50,000 in upgrades, and landscaped the property as well. 
These factors are not being considered, I feel.  The "cheap" homes are truly not a good comp compared to the sale which may have upgraded countertops, appliances, landscaping, etc.

Nov 18, 2012 03:26 AM #1
Rainmaker
264,436
Pat & Steve Pribisko
Keller Williams Greater Cleveland West - Westlake, OH

In 2012, we have not had an appraisal problem yet.  Perhaps, it' because our Buyers have not elected to purchase distressed homes (after looking at one or two).

Nov 18, 2012 03:39 AM #2
Rainmaker
849,042
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Nancy I get it but the problems exist on the turn.  Then it does move to a new pricing.  Yes the condition will become more and more of an issue for the appraisers.

Nov 18, 2012 03:39 AM #3
Rainmaker
849,042
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Thank you Pat and Steve for your comments.

Nov 18, 2012 03:44 AM #4
Rainmaker
1,017,196
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

We who have been thru this before do know this appraisal issue is something that does happen on the turns.

Nov 19, 2012 12:45 AM #5
Rainmaker
849,042
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

Yes Tim it does help to have been through this before.

Nov 19, 2012 01:01 AM #6
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainmaker
849,042

Elite Home Sales Team

A Tenacious and Skilled Real Estate Team
We are here for all your real estate needs!
*
*
*
*
Spam prevention

Additional Information