“Appraisals Aren’t Always Equal”

Reblogger Melanie Narducci
Real Estate Agent with Hillscape Properties, Inc. DRE#01452976

Appraisals Aren't Always Equal

San Francisco's housing stock is so varied in style, age and condition, that it can be a challenge to appraisers and agents alike in pricing properties.  Developers of new buildings set their own prices with their preferred lenders, but sellers of existing homes need to rely on the recent comparable sales which your San Francisco real estate agent will provide.  

Features such as a view, a double lot, recent remodeling, parking, central heating, new windows, outdoor space, and more all play a part in the value of a property.  Buyers who will be financing their purchase will want to see the appraisal come in at their offer price, or above, and while there are plenty of cash buyers in our market, sellers should keep this in mind when pricing their San Francisco home for sale.  

Original content by Joe Petrowsky NMLS # 6869
“Appraisals Aren’t Always Equal”
 
Clients of mine were in the process of purchasing a historic home in a village setting. Their credit was great, they were putting $100,000 down on a $400,000 purchase, so far all was great.
 
home salesThe appraisal was completed and the value came in above the sales price, but we had a problem. There were no comparables that were considered historic homes. The home was built between 1880 and 1890, the style was a Victorian. All the comps were from the same town and all were colonials built between 1998 and 2009. All sold above the subject and all in a similar price range.
 
The lender went back to the appraiser asking for the comps to be in a similar “vintage” to the subject. There weren’t any sales in the same town, other than one short sale and the closest similar comps were 40 miles away.
 
I asked the selling agent to see if they could find any sales that did not come through MLS and as luck would have it, because of some great homework, two comps were supplied to the appraiser that were within 10 miles, which eventually satisfied the lender.
 
The unfortunate thing, the appraiser really didn’t want to do any extra work, as he felt the lender was being unreasonable. Even though I felt the lender was being unreasonable, they were the ones loaning the money for the mortgage. It’s tough when egos get in the way of getting the transaction accomplished for the buyers.  
 
image courtesy of jscreationzs/freedigitalphotos.net

 

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Rainmaker
864,116
Les & Sarah Oswald
Realty One Group - Eastvale, CA
Broker, Realtor and Investor

Great leg work in getting comps that were not listed on the MLS. I can understand the lender's side in wanting these for the appraisal, but if these were not available then why not come in at the asking price?

Mar 10, 2014 09:51 AM #1
Rainmaker
2,351,718
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Thank you for the re-blog Melanie. Sure there are certain appraisal that are a challenge, that comes with the territory. My frustration comes from the appraiser that isn't willing to do the necessary work to get the appraisal right.

Make it a great week!

Mar 10, 2014 10:22 AM #2
Rainer
66,892
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert

I'm with you, Joe, it's their job!  Thanks for stopping by and keep the great content coming.  

Hi Sarah & Lester, I'm always grateful to the agents that put in off-mls transactions "for comp purposes" into our mls.

Mar 10, 2014 10:34 AM #3
Ambassador
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Kristin Hamilton CA Realtor
Sun Lakes Realty - Banning, CA
(909) 557-6966- Specialize 55+ Communties Banning

Hi Melanie,

I totally agree and they get paid a good price for the appraisals so they shoud do the work completely. I live in an area where there are many old historical homes but they do not always qualify as sometimes they are too old or too far away. Great Re-Blog!

Mar 10, 2014 04:00 PM #4
Rainmaker
5,984,028
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is a good selection for a re-blog. I also subscribe to Joe's blogs.

Mar 10, 2014 08:31 PM #5
Rainer
66,892
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
Thanks, Roy, Joe is certainly one of our gem bloggers. Kristin, we have some properties here that are not financeable due to condition, or condos that have ongoing litigation.
Mar 11, 2014 12:09 AM #6
Rainer
66,892
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
Thanks, Roy, Joe is certainly one of our gem bloggers. Kristin, we have some properties here that are not financeable due to condition, or condos that have ongoing litigation.
Mar 11, 2014 12:10 AM #7
Rainmaker
99,872
Laura Andersen
Keller Williams Realty Partners ~ 678.462.1191 agentandersen@gmail.com - Woodstock, GA
A HomeSOLD Name (678)462-1191 Woodstock, Georgia

I'm not a big fan of home appraisals here in Georgia.  Until a couple of years ago, we could not quote square footage.  We also have a big variety of styles of homes.  I called the challenge of determining the home's value as the "Dart Board" method of coming up with the value of a home. 

Mar 11, 2014 01:00 AM #8
Rainmaker
773,630
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good Morning!!  This is some great Info for all in the business, keep up the good work and good luck in 2014,  E

Mar 11, 2014 02:00 AM #9
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Robert Vegas Bob Swetz
Las Vegas, NV

Hello Melanie ... Great post and you are so right! Not only that some appraisers can tweak their numbers. Great re-blog and featured to the group:

CALIFORNIA DREAMING

VB ;o)

Mar 12, 2014 09:41 AM #10
Rainer
66,892
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
Thanks for the feature, Bob!
Mar 12, 2014 10:03 AM #11
Ambassador
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Robert Vegas Bob Swetz
Las Vegas, NV

You are so very welcome ;o)

Mar 13, 2014 07:54 AM #12
Ambassador
878,454
Connie Harvey
Pilkerton Realtors - Brentwood, TN
Realtor - Nashville TN Real Estate

Melanie, appraisals really can be tricky in older neighborhoods when there are so many variables that determine the price!

Mar 26, 2014 05:28 AM #13
Rainer
66,892
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
It can be tricky indeed, Connie. Here in San Francisco - aside from new condo buildings, and infills - all our neighborhoods are older, and while neighborhoods have price ranges appraisals are really all about the condition of the property. Thanks, Ed!
Mar 26, 2014 05:35 AM #14
Rainmaker
1,279,738
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Melanie:  As a former appraiser, I know the challenges that are faced when asked to appraise a very unique property.  Sometimes comparables are just not to be found within the area.  Depending on the Underwriter's demands for "proof" of value, it can be virtually impossible to satisfy their demands.  Exactly why the Appraiser themself becomes so important.  The real professionals dig in, find the supporting facts, sales, and figures ... and write the thorough narratives to support their evaluations.  Tough road ...

Gene

Apr 10, 2014 11:14 AM #15
Rainer
66,892
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert

Thanks, Gene, you're so right that nothing beats having an experienced appraiser willing to do the background work.  

Apr 10, 2014 11:52 AM #16
Rainmaker
5,984,028
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

I was looking for your current blogs. I hope all is going well for you.

Have an outstanding 2017!

Jan 10, 2017 08:22 AM #17
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Rainer
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Melanie Narducci

Your San FranciscoBay Area Real Estate Expert
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