I’ve had my condo up for sale by owner listing for 100K and after several offers which were all within $1,500 of the asking price, I put it under contract with someone that agreed to the asking price of 100K.
I’ve been in my condo for about 10 years, and being a breaktimer, I’ve fixed it up top knotch… very nice custom hickory cabinets for the kitchen, real hardwood flooring in the living area, very nice tile job in kitchen, bath, new bathroom cabinets, with granite counter tops, custom built high-end closet system for the bedroom, the washer and dryer have been very nicley moved into the upstairs area verses the downstairs seperate entrance like is standard out here… the list goes on, and I would say a very conservitve value of the upgrades I have done would be over $20K.
All was well untill a couple of weeks ago the appraiser valued it at 95K, which was what the buyers lender had to base there loan on, and of course the buyer didn’t have the extra cash to make up the difference. The apraiser said he had to base it on other sales in the neighborhood, which only supported $95 for mine.
I looked into getting a second appraisal, and was informed by his bank that it could be re-appraised (most likely at my cost) and they would then take the average of the two to base their loan on.
All things considered… The second appraisal would be a gamble which I could only get half the difference between the two, and I’m already moving into another place in about a week now. I fought the good fight, but reluctantly dicided to take the offer and be done with it.
Everybody brags about their own work, but I really had put a lot of very nice stuff in my place… 4 other condos that sold in the past year in this development have gone for $88, $92, $94, and $91… and another one a couple of blocks over just went under contract for $93 which has had absolutly no upgrades since it was constructed in 1984. None of the other condos sold in the past year came close to matching my upgrades.
Considering all the improvements that I had done to mine (everyone who has seen it concurs that it’s the nicest one the have ever seen in our neighborhood), and farily deducting for the fact that it is a “condo”, $100k seemed like a very fair, even low price, and a price that I had no problem getting within 3 weeks of putting it up for sale (an add on craigslist).
I’ve known all along that I had “over-improved” my condo, and would never re-coupe everything… and was alright with that. But giving me 2K more than someone who hadn’t done anything to theirs?
I watch the news everyday, and occassionally read the real estate section, so I know all about the houseing market problems of today, but still this appraisal suprised me.
Anyone else running into this problem? Are appraisers trying now to make up for past sins by “under-apraising”?… If so, it seems like they are shooting the housing market in the foot all over again.
Location… my condo is in raleigh nc, in one of the most premium locations.
Edited 6/24/2008 11:55 pm ET by drbgwood
Replies
just two things:
1 - appraisals never take into consideration all the 'custom' touches
2 - you never want to be the nicest in the neighborhood just for the reason you describe (unless you intend to stay there)
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
"Anyone else running into this problem?"
Yup.
back when I was selling cars ... not one person walked in and thought their car was worth what it was actually worth. 100% of them thought it was worth way more than the fair trade in value.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
Just to re-iterate...
I had three offers within 3 weeks of putting it on the market... the lowest offer was within 1.5% of my asking price, and then I got the asking price offer under contract. In todays market, I think that's a strong indication that I was not aiming too high.
And I might mention as well... there was a total of 5 people that came to see it... 3 of them made the offers.
Edited 6/25/2008 12:45 am ET by drbgwood
Edited 6/25/2008 12:46 am ET by drbgwood
Edited 6/25/2008 12:47 am ET by drbgwood
how much did it sell for?
Jeff Buck Construction
Artistry In Carpentry
Pittsburgh Pa
We changed the contract to the appraisal price of $95K... I'd have never put it under contract for that amount to begin with, but since the ball was already rolling - inspections, banks, layers, moving to my next house already....
Even the buyer has been remorseful and admits that it's a raw deal for me, and he would have gladly financed the whole amount... but the appraiser ended up being the one who wrote the deal.
back when I was selling cars ... not one person walked in and thought their car was worth what it was actually worth. 100% of them thought it was worth way more than the fair trade in value.
Which fair trade value?
Most buyers go to Edmunds for trade in value since their already there trying to figure out what to pay.
The two dealers I worked at were strictly KBB.
Edmunds and KBB can be thousands apart. So they start out with false expectations.
On top of that most dealers around here Use Manhiem online to pull auction results for any trade with more than 60K miles on it.
I sold in the days before everyone had a computer at home and could look up anything they wanted. A paper copy of Edmunds was the most you were up against.
I'd hate to have to do battle with some of these byers now. Every one convinced that their 6 your old Grand Caravan is worth $12k and that they can get a new Explorer for $20K.
fair trade value was what our used car manager and every other used car manager was offering.
and it was always way less than what the people were expecting.
they worked straight from the books ... KBB and Edmunds.
before computers ... but the books were available.
usually people thinking their poor condition car was excellent, and the high miles didn't matter because they were all highway miles.
the point is ... anything ... is only truely worth only what someone else will pay for it.
everything up to that point is just a guess.
Jeff
Buck Construction
Artistry In Carpentry
Pittsburgh Pa
"the point is ... anything ... is only truely worth only what someone else will pay for it."
If only the appriser followed such common sense logic.
...So what's done is done, and lessons learned.
I am a little intrigued at the other aspect of appraising though... He charged $250 for maybe a 15 minute visit to my house... took a few measurements with a laser, snapped a few pictures, and scribbled something that looked illegible to me when I volunteered some information about my improvements just before he left...
OK, if you count walking out to his car in the morning, stopping for gas, getting breakfast, driving to my house, being there for 15 minutes, stopping for a snack on the way to his next victim, spending a few minutes at his computer to get the comps, and emailing the bank.... maybe it was an hour and a half for him... $250.
So how does one become an appraiser? I didn't get the impression that he had an PH.D. in engineering.
Actually, the guy I use is a state licensed engineer, and also holds a contractors license.
There are courses you can take to become a appraiser. I've toyed with it as a retirement job. The big downdide I see, is you can get drawn into alot of litigation. Realestate, at least here, is pretty cutthroat. Worse, I think than being a contractor. :)
Brudoggie
Just be sure you get paid well to testify.
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
So how does one become an appraiser? I didn't get the impression that he had an PH.D. in engineering.
I know there is licensing for appraisers in the state of Nebraska, with varying levels of expertise and responsibility. I believe that in order to charge for appraisal one must be licensed. Don't have to have a real estate license, though.
Jason
I just sold a house which I had appraised. It was appraised by a friend (professional appraiser) lower than what I had expected. I spoke to him about the appraisal and he stated that he could not hit the exact value on any house. There is always a bit of wiggle room.
I had two parties interested. I showed them the appraisal and told them that was the starting price and I would take the highest bid above it.
The bid was $2500 above the appraisal and there was not problem with the bank.
Maybe your appraiser can suggest that he could be $5000 off the mark and the bank will let the deal go through. 5% is not much of a difference.
Good luck.
dr,
I sold a townhouse in November.
It was by far the nicest in the neighborhood. I had started the remodel with the plan to stay until my son graduated college. Based on being there 4 more years I did a lot of things I might not have done otherwise.
New Kitchen, floors in EVERY room, new windows and ext. doors, two piece crown in EVERY room, nicest deck, finished basement with a family room and office, cable and phone jacks everywhere as well as a pretty well set up network, 1 new bathroom etc, etc,etc..........
Every single person who looked at it told the realtor it was the nicest one they looked at.
In the end?
It's all about the comps. It didn't appraise for what the realtor suggested as listing price. Off by about $6K .
Those little extra touches won't pull the price up but you can be sure that outright neglect will drag it down.
If you have "The nicest one"? you lose at sale time.
5% is a decent chunk, but will you walk away with cash in hand??
The other option is to hold out. Next buyer may have enough cash on hand and want the house bad enough to cover the spread and negate the appraisal.
"everyone who has seen it concurs that it's the nicest one the have ever seen in our neighborhood"
Translation - You overimproved the unit resulting in a value contribution less than the cost of the improvements.
Not sure where you are located, but most markets around the country have an over supply of homes for sale and declining values. Sell the unit for $95K, it may be worth less in a couple of months.
I knew ahead of time that I had over improved and would not get the full amount back from my upgrades to the condo, and had no expectations at all of the 200% improvement returns you see on tv. 95K is the expected price out here now for one with no improvments, I was only aiming for 25% (5k for 20k worth of work) of my upgrade investment... didn't even get that.
Considering another one just went under contract for $93 with no improvments and a bad heat pump... I got nothing.
let that be a lesson to you.
next time don't fix up your house, thrash it like you rented it, and just give it a new coat of paint before you sell it, you will be money ahead.
Based on very personal and painful experience, I have an extremely low regard for realtors in general and appraisers to boot. In many instances it's just another box to them. There is no passion with what they do. They are numb. I could go on and on but I'll spare you, as I feel myself getting PO'd thinking about it.
have an extremely low regard for realtors in general and appraisers to boot. In many instances it's just another box to them. There is no passion with what they do. They are numb. I could go on and on but I'll spare you, as I feel myself getting PO'd thinking about it.
The reason realtors tend to treat one house as more or less like another is that they are. At least to buyers, and they're the only ones whose opinions ultimately matter.
Housing has basically become a commodity. Sure, there's still an element of emotion to it, but especially in places like lower-priced condos and starter homes, one is basically just like another. A split entry is a split entry; you can shove all the granite countertops, tiled bathrooms and hardwood flooring into it you want, it's still just a ranch with a drive-under garage. You want a unique, special space? Be prepared to drop million-five on a custom on 20 acres in the country.
Piss-n-moan about it all you want, hate realtors and appraisers all you want (and many appraisers are no more competent than realtors in determining a home's value), but in the end, a market is made up a buyers and sellers. Period.
What I was trying to express was the low life caliber, non-ethical, no knowledge of what they are looking at, ie, proper terminoligy of say CROWN. Took the listing of my home, and I knew this realtor, obviously spoke of multi-listing system, and then they didn't multi-list it. 3mos. later another realtor tells me it's not in the system. I was told it was such a great house and location that they felt they would sell it In House (their office). I'd still like to kill that person, with any luck they got cancer. I ended up selling it myself. Ever carry two houses for 4 months, I wasn't rich then and ain't rich now, it really put my family in a hole. Another comm. property I find out the guy was just an agent had told me he was a broker, got screwed there too. Another woman tells me the house has an oil burner, send out a co. to inspect, GAS fired. Cost me a service call. I could go on but won't. Ruining my day...........
What I was trying to express was the low life caliber, non-ethical, no knowledge of what they are looking at, ie, proper terminoligy of say CROWN.
CROWN? Term's unfamiliar to me as well. Certainly not something I encounter in residential real estate. Though if it's a widespread real estate concept, I'm sure I'm familiar with it, just not the particular term. Want to explain?
I tell people that what I do is help people buy and sell homes. Anything else is outside my purview. They start asking me about condition, etc, I tell them to go get an inspector or building pro. I ain't gonna be on the hook for that ####.
Took the listing of my home, and I knew this realtor, obviously spoke of multi-listing system, and then they didn't multi-list it. 3mos. later another realtor tells me it's not in the system. I was told it was such a great house and location that they felt they would sell it In House (their office).
That should've been disclosed on the listing agreement you signed, regardless of what the realtor told you. Our agreements not only specify the type of agreement (exclusive right to sell etc), but also include a particular clause specifying that the home will be placed in the MLS and advertised, etc. If you were contractually promised the property would be marketed and placed in the MLS and it wasn't, I'd complain to the state licensing authority.
Another comm. property I find out the guy was just an agent had told me he was a broker, got screwed there too.
How so? I'm don't do commercial, but I'm trying to envision how it would make a difference. All sales are run through a broker's office in any case.
Another woman tells me the house has an oil burner, send out a co. to inspect, GAS fired. Cost me a service call.
Who was this woman? The agent, or the seller? Mostly we have to depend on what sellers tell us about the property; the difference between gas & oil may be obvious to me and you - they can hardly be confused IMO - but to some clueless agent, perhaps it's tough to tell. Again, we don't do anything other than buy & sell real estate. Anything else is outside our expertise and responsibility.
This is a really common issue. Appraisals are based on the sale price of like and kind units in the surrounding areas with a bit of wiggle room for upgraded improvements. No one property will "bump" the value of others by a great deal unless someone with cash is willing to buy above appraised value. Which rarely happens.
All that being said the other issue is that often the over improvements are in areas of the home that the home is supposed to have anyway. Putting on a new roof, remodeling the bath, the kitchen, new flooring is not truly an appraised improvemnent. None of this adds retail value as it is all subjective to the buyers likes and dislikes. In some cases because of taste it depreciates the unit because the taste of the initial owner is not what is generally in tune with the market. It is simply not like adding a bedroom or bath.
I just had a client that had to cut back on their project because the appraisel wasn't high enough. They said to me " I don't get it, we put on a new roof, siding and windows and the value went up only 2k". The reason is that their house is supposed to have a roof, siding and windows. The idea is that when things wear out you replace them. What you choose to replace them with is subjective and may be over and above the neighborhood level of quality. But few are really willing to pay for that.
Newer improvements often mean it will sell quicker as the buyer doesn't have to deal with those issues right away. But it doesn't mean it is worth a ton more money. Makes you wonder about all those houses that are fixed up on TV for folks that are in need. Everyone else has a 1500SF two story with 2 baths and now the needy folks have a 4k SF 4BR 3 bath house in the same neighborhood that is probably worth 10k more than the 1500SF places. DanT
All that being said the other issue is that often the over improvements are in areas of the home that the home is supposed to have anyway. Putting on a new roof, remodeling the bath, the kitchen, new flooring is not truly an appraised improvemnent. None of this adds retail value as it is all subjective to the buyers likes and dislikes. In some cases because of taste it depreciates the unit because the taste of the initial owner is not what is generally in tune with the market. It is simply not like adding a bedroom or bath.
Couldn't tell you how many times I've had that exact conversation with a seller/client - "But we just put in all new Marvin windows!"
They get that "lightbulb-going-off" look when you point out that things like you mention are maintenance. Well, most of the time they get that look. The ones that don't you know are going to be a real pain in the arse.
Jason
Yes, the Raleigh real estate market is in shambles. We have been having a few sales though in new homes. We have one this Friday in which we are loosing a significant amount of money though. It's been sitting for 16 months. Others we made a little on.
My company has a new condo building in Cary that is dead in the water - sale wise.
If you had 3 close offers in 3 weeks it would seem like you could just wait for another. Sounds like it might be too late for that?
This appraisal thing can go the other way too... When my parents passed away I had the house appraised by an appraiser. I felt compelled to sell it for that amount to be fair to my siblings. The house was in good shape but had never been updated. Pink tile, no master bath, etc. The comps that were used had all been updated. There was no way I could sell it for the appraised value. I ended up selling it for around 7% less after messing around for about a year. There was no mortgage payment so it wasn't a total mismanagement of money - it was just a lot of stress on me.
Really, I think real estate agents give more accurate appraisal than appraisers. Appraisers use data. Real estate agents use data and the soft stuff like the newest market conditions, number of units on market and more unusual things that might effect the value.
Although I don't work professionally in this area my gut is that certain update type improvements contribute more to the salability of a house than the actual dollar for dollar value of the home. Improvements that add square footage almost certainly add more directly to the sales price - providing the neighborhood can support it.
In your scenario here is another way to look at it: You may have gotten the fair market value plus you saved having to pay the real estate agent commission. OTOH you caused your self a little heart ache by not using an agent. An agent would have likely seen all this well in advance.
I guess you learned a valuable lesson re over-improving. When I was first reading your post my eyebrows definitely raised when I read "100k", "condo" and "granite". I read a lot of that stuff here at BT - people saying that your interior molding needs to be back-primed which drives up costs un-necessarily. Recommending Installing Marvin Integrity windows in a 100k house. Azek trim on a double wide. etc, etc, etc. Which is all fine if it makes you feel good and that is what you want. As far as an investment though - bad - bad - bad!
We just took out a fixed mtg. on a three year old loft home on a prime lakefront in the UP of Michigan. The appraiser valued the place at $350,000, with $100,000 being for land value. The interesting thing is that when we added up out receipts and bills for construction of the house and three car garage, well, septic system, etc. it came to $366,000! Add in $100,000 for the land value it comes to $466,000. The thing is that appraisers work for banks and realtors, not sellers. Realtors want the price set low for a quick sale and bankers want a low figure for "Loan-to-Value". I talked to the appraiser concerning the figure and he told me that he would usually knock off 25% in value of a new home as that was "Builders Profit". Well, excuse me! Don't the Bankers, Realtors and Appraisers make a "Profit"? He charged $350.00 for the appraisal. I should have asked him to knock that down 25% because I don't feel I should pay him any "Profit"!
was thinking about this thread
condo sod by owner by owner, got $95K
if sold by RE agent for $100K he would have got? $94K?
bobl Volo, non valeo
Baloney detecter WFR
"But when you're a kibbutzer and have no responsibility to decide the facts and apply the law, you can reach any conclusion you want because it doesn't matter." SHG
not necessarily. Commission is always negotiable, and when I take a listing, I always give the seller the option to pay 4% if I procure a buyer. The part that I don't understand is the difference between the $100k and the $95K. The buyers are using a mortgage. Are they using a conventional or an FHA? If it's FHA they could be financing 100%, but thats a recipe for disaster from the beginning. A conventional buyer is stronger 90% of the time. Most conventional loans require at least 5% down. That would cover the difference from the appraisal to the sale price and should not have been a problem. I would have gone back to the other buyers before knocking my price down. You still need to get through inspections, and you are already out $5000. If you haven't already prepared your agreement of sale, make sure you protect yourself with low repair caps. Let your seller know that since you already cut your price $5,000 to help them out, that you don't intend to put much if anything back into the condo for repairs. FHA will do their own inspection and will ask for repairs for everything that isn't perfect. Home Inspectors always find something as well. Unfortunately, home inspectors often lead buyers to believe that they can use their findings as leverage against their sellers.
I did what you said about taking any repair cost, expected or unexpected out when we re-did the contract. I had originally thrown in the washer / dryer and refidgerator as an off-contract perk... I got those back too.
that was smart. Do you have an attorney preparing your contracts for you? That is something that most people wouldn't think of doing. There are alot of advantages of using the services of someone who does this every day. I always tell potential clients who are thinking of trying to sell their houses on their own to go for it. Half of them call me back after a couple of months. Some of them go with another realtor who used some high pressure sales tactics, And then there are the fortunate ones who find their own buyer. When I sell my own homes, I don't use a realtor. I never tell buyers that I'm a realtor. I sell them as if I'm just a regular home owner. But then again, I know how to market, and how to prepare contracts.
I havn't hired an attorney, but I do have a couple of close friends who are realtors and have been guiding me thru the process, checking the paper work ect... She told me not to tell anyone she was doing that for me... but were all friends here..:)
The buyer does have an attorney, and I've heard only positive things about him from several different sources, including my agent friend, so "knock on wood", I'm not expecting anyone to try to screw me over... well, other than the appraiser.
" When I sell my own homes, I don't use a realtor. I never tell buyers that I'm a realtor. "I am not sure, but I think that in MO that you are required to disclose that..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
If you list it with a broker, you are required to disclose it. When you sell a home on your own, you don't have to disclose anything. Unless somebody asks..... There are negatives to buying a house that is for sale by owner as well. Most buyer rely on their realtors to find the answers to questions like that (not that being a realtor should make any difference to a buyer). Also, when a person sells their house without using a broker, the don't fill out a seller's disclosure which is something that every buyer should have, but no seller wants to provide.
Many state are now required active disclousers at least for certain conditions regardless if there is an RE agent involved or not..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
When I sell my own homes, I don't use a realtor. I never tell buyers that I'm a realtor.
Boy, you wouldn't want to do that in my area. We have to disclose if we have any ownership interest in a property we're selling whether or not it's listed on an MLS. If I got caught doing that I'd be working at Lowe's pretty shortly - not only would my license get yanked, my broker would toss me under the bus.
Jason
who enforces that? When you sell your own home, you prepare your own contracts? You need only to use an attorney or title company to handle the settlement and recording of the deed. They only get involved at the very end. If it's a cash deal, there is even less outside involvement. The appraiser and the lender will never require a disclosure.
"who enforces that?"So you are saying that it is OK to break the law as long as you are not caught..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
who enforces that?
In my area, they're called the state Real Estate Commission. From my perusal of the NJ RE Commision's website, it would appear that NJ has rather stricter licensure and ethical standards than Nebraska does. I can't imagine that they don't require a similar disclosure.
When you sell your own home, you prepare your own contracts?
When I sold my home last year, I listed it, so it was subject to a regular listing agreement and purchase agreement (from the buyer's agent).
You need only to use an attorney or title company to handle the settlement and recording of the deed. They only get involved at the very end. If it's a cash deal, there is even less outside involvement. The appraiser and the lender will never require a disclosure.
All of which has exactly zero to do with the requirement to disclose. State license law here (and elsewhere as we've seen) requires it, and I wouldn't be surprised if the NAR Code of Ethics does as well. Not to mention that it's an ethical thing to do on principle.
Jason
In Texas we are legally and ethically bound to disclose that we are licensed RE agents when selling or renting our own property.Very surprised that NJ allows you to not disclose that you are licensed."Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
"Most conventional loans require at least 5% down. That would cover the difference from the appraisal to the sale price and should not have been a problem. I would have gone back to the other buyers before knocking my price down. You still need to get through inspections, and you are already out $5000."Yes, but then the buyer would not be 95% barrower, but a 100% barrower..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Tuneman,
Where's your place in the UP?
The thing is that appraisers work for banks and realtors, not sellers.
Heh, I wish I had an appraiser in my back pocket. They work for the lenders. In the case of FHA/VA loans, they're drawn allegedly at random from a pool.
Jason
Yes, it is happening here in MI too, but to a greater extent than what you describe. One way to recoup may have been to arrange a personal financing deal between the buyer and yourself (outside of the mortgage loan) for the extra 5k, especially since the buyer seemed to think you are getting short changed.
I also had the "best" house on the block and had a similar experience when selling. Houses with no improvements at all were selling for about the same price because that's all the market would bear for that area. And not all improvements as defined by the homeowner actually net any value during a sale.
My experience with appraisal is not a good one, just like my experience with real estate agents. I'm thinking it's pretty much a racket.
Ten years ago we bought this house for $95K, $5k under the asking price. House appraised (lending bank's appraiser) for $100K then.
About 2 years later we applied for an equity line of credit to pay off some business debt and make some repairs. That bank's appraiser walked through, mentioned the upgrades we had already done, and said the property was worth about $80K. I was shocked at first and I questioned the amount. He, in turn, was kind of shocked that our first appraisal was $100K. He told me the going price for our 3 acres, and I had to agree that the balance seemed a bit high for our modest house to carry.
There was no market change to account for the drop. The appraiser hinted that perhaps the first appraisal was a little generous. He said he would check his comps and go over the figures again.
Meantime I'm thinking that the original mortgage lender was looking to fill a quota and told the appraiser how much the property needed to appraise for to get the loan. I still think that's what happened. I learned recently from a customer that my mortgage lender is considered "sub-prime", a term I'd never heard before recent events. Does make me wonder about their practices...
We did get the equity line, based on a revised appraisal of $95K, again probably because the bank wanted it to be that much. Maybe they thought I would go back to my mortgage lender and demand an explanation if the appraiser stuck by his $80K.
Years later, I have now revised my opinion of automobile salespeople and phone solicitors and placed them above realtors and appraisers.
A scientist, a mathmatician and a RE appraiser were asked to solve a particular equation.
The scientist did his calc and provided a specific answer.
The mathmatician did his and came up with a different answer.
The RE appraiser went over and shut the door and asked, " what do YOU want it to be?"
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
That sounds about right.
To be fair to appraisers, their's is not an exact science, or even any kind of science or mathematics. There are too many factors that figure into their equations that have to do with purely "emotional" input. Sorry, I can't think of any other term to describe why certain areas will suddenly become "the" place to live and prices will be way above any real value the property possesses.
Hopefully, my house-buying/selling days are over until we head for the retirement home....
I have been envolved with 2 apprasials.One was a refi about 20 years ago. I was very impressed with the report. I live on a private residential lake with homes from 70 YO cabins to new McMansions. So direct comps are not easy to find. I thought that he did an great job with finding ones and making adjustments for very different houses. He also compared it with replacement cost.The other was the sale of a church about 10 years ago. He did commercial and had was recommended from doing another church. But he missed a nearby current comp and used distant and older comps. Was wrong on basic facts on the construction and what was allowed for the zoning.Then he presented several analysis, but in the end said that church where are to compute and he just guessed at a number..
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A-holes. Hey every group has to have one. And I have been elected to be the one. I should make that my tagline.
Looks like there's a lot of difference in quality of appraisers out there.
The appraiser who did one for the house I used to live in was very good. Her report was thorough and she paid careful attention to every part of the property.
Like a lot of other things these days....buyer beware!
maybe even more difference in appraisers than there are opinions in breaktime! now thats a scary thought.
good point...
appraisals are just a 'defensible estimate of value'..
but the banks treat them like they are the 'final word' on value....
and so they become that for too many people.
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
but the banks treat them like they are the 'final word' on value
All too true, I'm afraid.
Now, does anyone want to talk about "house inspectors"?????
Lead the way. I'm sure there aren't many here with opinions on those. <G>
"Never pick a fight with an old man. If he can't beat you he will just kill you." Steinbeck
Can't imagine anyone of our BTers staying neutral on that subject!
There are a good number that I would have loved to have had as an inspector on this house.
I will, in fact, never buy another house that I don't have inspected by people I choose myself. I notice that realtors all seem to have favorite inspectors also, including favorite lenders and appraisers. Down that path lies ruin...
"Anyone else running into this problem? Are appraisers trying now to make up for past sins by "under-apraising"?... If so, it seems like they are shooting the housing market in the foot all over again"
Thats exactly what is happening all over the country. It isn't going to change anytime soon. Fannie Mae and Freddie Mac have set down new guidelines regarding the amount of contact between the appraisers and banks. The banks can no longer tell the appraiser what the amount of the loan is going to be.
The banks used to auction the appraisals by putting them out for bids with the loan amount given. The appraisers would literally bid to get the contract to appraise and of course, if they appraisal didn't match the loan amount, they would need to bother bidding on any further work. Now, there is a significant separation between the appraisers and banks. As a result, the market will have to find it's equilibrium.
I sold a condo in a project that reset the entire appraisal process 30k lower! I don't know if there was another seller in there that could get something appraised after I sold out.
Bob's next test date: 12/10/07
My personal experience with appraisals is this, doesnt matter if your electrical is new. If you have an electrical system and the neighbor has an electrical system then you are at strandard with the neighborhood.
Used to piss my ex bus part off everytime. If your house has typical things in it then its a typical house. The age of the items are taken into account but it doesnt change the value as much as you and I think it should.
As far as your hickory cabinets, once again, its typical for a house to have a kitchen and your asset my by the buyers liability. They may hate Hickory regardless of what they've told you and know they have to pay to rip out your work.
Hate my hickory cabinets?... impossible!
I do get your point though, and from a "buyers" prospective, I was looking at a house I was considering purchasing a few months ago. It was an old house that the owner had "fixed up". He's a professional builder, and the house showed it.
In this case though, I was turned off in that everything in the house was brand new... carpet had never been walked on, appliances still had labels, walls were painted the most perfect "beige" you can imagine... but it was all the most basic "off the shelf" "Lowes" type stuff he could find. I'm sure he'd spent thousands on the make over, but I could do was envision ripping it out one piece at a time and putting nicer stuff in there... not to up the value, but just to make it more the type of place I'd like to call home.
If he'd have gone just a little higher on the material, his labor would have been the same, and it would have been a lot more appealing. That house is still on the market and has been for over 7 months now. He has it listed with Remax. So far I think he's dropped the price 20% from what he was originally asking. Still it sits with no one living in it. I'm betting it will come down to about 30% off in a few more months, then I might make a move.
I put mine on craigslist and had a full asking price written offer in less than 3 weeks.
Even other "un-improved" condos that have sold in my neighborhood sat for months and months un-occupied. The people selling them still have to make those monthly payments.
So, the flip side of this lesson... if you "are" going to go to the trouble of tilling a kitchen floor, in spite of whatever the market is doing or the appraiser is going to say, don't just use the cheapest tile you can find on clearance at Lowes.
Edited 6/26/2008 10:51 pm ET by drbgwood
Edited 6/26/2008 11:27 pm ET by drbgwood
How much did you pay for it five years ago?
Can the appraiser see what you paid for it when he looks back at the records?
If the 10 most recent "comps" are lower than your price then the appraiser may be accurate
One theory is that people will buy the cheapest house, even if it's in worse condition
The better house with a higher price tag may just sit there and never sell
One method for pricing your home is to have a flyer sitting on the dining room table
The Buyers walk in and you hand them the flyer with the pertinent info such as price, size, property taxes, HOA monthly, neighborhood amenities such as pool, mowing, snow removal, water and trash, etc
An astute seller will have a second flyer with recent comps which document his sales price.
If the other homes are selling for $95 then that is probably what it will appraise for
Good luck!
Edited 6/26/2008 11:09 pm by mrfixitusa
Actually I bought it 10 years ago for 65K
I tried to sell it 5 years ago, and the best offer I got was 75K. decided I'd wait a few more years.
Pricing homes is the hardest part of real estateFive appraisers would give you five different pricesSame with realtors. You would get five different opinions.If your price is too high, you are then trying to compete with condos that are one step above youFor example, you have an unfinished basement and you price it too high, you are competing against similar size and age condos with finished basementsIt happens all the time