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Old 04-30-2015, 11:08 AM
 
294 posts, read 310,090 times
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Quote:
Originally Posted by riaelise View Post
But the offering price itself is *usually* (not always) based on a CMA, which takes into account the neighborhood trends, right? Our realtor priced our home based on a CMA and continuing neighborhood activity. At least with our realtor, he priced our home pretty close to what it would appraise for. This wasn't coincidence or collusion. it was using the CMA and his analysis of the market...which is pretty similar to what an appraiser would do as well. I really don't think the appraiser based his decision on our realtor's purchase price at all. He took a comparison of the surrounding properties within the neighborhood, their condition, our home's condition, and other things to arrive at the number. He wasn't trying to make it work to satisfy a lender. In addition, it was a VA appraisal, which (from my experience) is more comprehensive than a conventional appraisal.

For the home we purchased, after reading the appraisal and looking at the actual market data that was included, it made a lot of sense to me as to how he arrived at the appraised value. Six comparables were used, the neighborhood was pretty much as he had described. He analyzed the overall trend of the neighborhood for the past year and went into great detail about it. No one sentence responses on the form. His assessment of the condition of our home was pretty spot on too. He took into account the actual style of the house and really tried to compare apples to apples. our home was considered "neo eclectic", it's not your typical brick house as it definitely has some unique finishes. He compared it to other similarly styled homes in the area. Comparing our home to a brick home even in the same neighborhood isn't an apples to apples comparison. Maybe this guy was just extra thorough. He appraised the house three thousand less than the asking price but two thousand more than our offering price, which means it was pretty much a wash. The purchase price was very close to the appraised value and I really don't think it was due to him trying to somehow justify the contract price.
ou

That is good if you believe it. I knew many realtors and got a lot of input from them regarding appraisal. In many cases, regardless whether someone thought the price was rediculously high, or was rediculousley low, or reasonable, but the appraisers were able to come out a number match the offering price well with the "Deep inside analyisis and evaluation". Those fancy reports could fool a lot of buyers and lenders. I even saw two reports from two different appraisers that appraised a property before and after $100K price drop. Both appraisal values matched these prices well.
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Old 04-30-2015, 11:17 AM
 
1,593 posts, read 1,830,327 times
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Wow.

Appraisers, appraisals, buyers and sellers.

Over and under.

This whole thread is reminding me of the great White and Gold or Blue and Black dress debate!
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Old 04-30-2015, 11:18 AM
 
Location: Austin, TX
12,799 posts, read 28,821,938 times
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My realtor friend indicated offers with big earnest money and waivers of appraisal contingency are top o' the heap in multi-offer situations.

FWIW
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Old 04-30-2015, 12:27 PM
 
Location: Austin, TX
171 posts, read 158,103 times
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Quote:
Originally Posted by Trainwreck20 View Post
My realtor friend indicated offers with big earnest money and waivers of appraisal contingency are top o' the heap in multi-offer situations.

FWIW
The true top of the heap is a cash buyer, high earnest, with no option period. No appraisal is required.
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Old 05-01-2015, 06:58 AM
 
Location: Downtown Austin
6,100 posts, read 15,396,946 times
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Quote:
Originally Posted by riaelise View Post
Most appraisers are not brainless boobs. Isn't that insulting a respectable profession? Just like insulting realtors because there are a few dolts out there.
It's more than a "few" dolts. Trust me. I have low respect for most Realtors also, but at least that's the consumer's fault for not doing a better job of interviewing and selecting.

You have no such choice with the appraiser, you don't know them, and they may not even know the local market. It's just whomever the banks "arm length" appraisal management company could squeeze down to a low enough price. It's no longer a "breadwinner" salary and there are a lot of part timers, just like real estate. That said, I do personally know some who are excellent, but they are no longer happy with how they are micro-managed.

Do some research about the appraisal industry and its "professionals" and it will confirm what I'm saying. Here, I'll help you ...

From this article:
"As appraisal fees go downward, quality is going in the same direction. The best appraisers, who have invested years and years in building their careers don't want to work for a company that they have to check in with every 12 hours, and get treated like a school kid in the principal's office. An untrained and unlicensed person on the other end of the phone is making their schedule and deciding who gets paid what. And guess what - it's going to get worse...

The best appraisers are finding other types of appraisal work (that values their craft), and the appraisers that work on mortgage loans are often the newer licensees or trainees. If all this Reform we're talking about is still hoping for higher quality appraisals for use in mortgage lending, we're in deep trouble. The best appraisers are leaving mortgage appraising as fast as they can."


I'll say it again, it is foolish and irrational to place so much value in the number that the bank's appraiser puts on a house. It may or may not be a good number, and it certainly does not belong in the front of the line as the "last word" on the value of a home. Paying "over appraisal" does not mean paying "over value" because the true value is based on the market, not one anonymous low-quality person's opinion.

Steve
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Old 05-01-2015, 07:28 AM
 
646 posts, read 496,095 times
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Quote:
Originally Posted by austin-steve View Post
I'll say it again, it is foolish and irrational to place so much value in the number that the bank's appraiser puts on a house. It may or may not be a good number, and it certainly does not belong in the front of the line as the "last word" on the value of a home. Paying "over appraisal" does not mean paying "over value" because the true value is based on the market, not one anonymous low-quality person's opinion.
If you are not an all-cash buyer, though, you're still subject to the amount of money the bank will lend you, which is directly tied to that "anonymous low-quality person's opinion."

I'm going to ask this again--those of you who think paying over appraisal is fine, would you do so if you were subject to needing a mortgage to pay for the house?
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Old 05-01-2015, 07:40 AM
 
Location: Downtown Austin
6,100 posts, read 15,396,946 times
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Quote:
Originally Posted by eirenecat View Post
If you are not an all-cash buyer, though, you're still subject to the amount of money the bank will lend you, which is directly tied to that "anonymous low-quality person's opinion."

I'm going to ask this again--those of you who think paying over appraisal is fine, would you do so if you were subject to needing a mortgage to pay for the house?
Those who "waive appraisal" have the financial means to do so. This certainly isn't the 3.5% downpayment buyer who can barely afford to buy. That's why they are also usually the first to get knocked out of the deal in multiple offers, because they are "weak" buyers, subject to the appraisal, which every Realtor worth their salt knows is a crap shoot when going over list price.

It's usually a 20% (or more) downpayment buyer who simply agrees to cure any appraisal shortage with additional cash downpayment, thus neutralizing the Loan to Value ratio that the bank cares about.

This is exactly what I did on our last personal home purchase 9 months ago. We waived appraisal, wrote the letter, went $25K over list, and came out ahead. The home didn't appraise, but is now already worth more than what we paid, so I gave up about probably 6 month's appreciation to get the house my wife wanted. And didn't think twice about doing so.
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Old 05-01-2015, 07:53 AM
 
Location: Greater NYC
2,907 posts, read 4,926,377 times
Reputation: 3872
Quote:
Originally Posted by austin-steve View Post
Those who "waive appraisal" have the financial means to do so. This certainly isn't the 3.5% downpayment buyer who can barely afford to buy.

It's usually a 20% (or more) downpayment buyer who simply agrees to cure any appraisal shortage with additional cash downpayment, thus neutralizing the Loan to Value ratio that the bank cares about.
It's THIS, precisely. Steve is on the money again. And this was the case for us in selecting the best offer. These people aren't financially stretching themselves. I think that's the point cynics in this thread are overlooking.

While we did select the offer that did not have an appraisal contingency, (among other perks) it didn't really matter for us since our home went for over asking AND did appraise.
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Old 05-01-2015, 08:10 AM
 
2,625 posts, read 5,614,133 times
Reputation: 1221
Quote:
Originally Posted by Idlewile View Post
It's THIS, precisely. Steve is on the money again. And this was the case for us in selecting the best offer. These people aren't financially stretching themselves. I think that's the point cynics in this thread are overlooking.
Not only that, but you also don't have to worry about them trying to nickel and dime you on getting the water heater or garbage disposal fixed if the inspection listed them as issues. These people have no problem doing those low cost minor repairs after the sale. When we sold our house to a VA buyer (I'll never do that again), we had to fix very minor things for the sale to continue and it was a hassle.

And yes, I would pay over appraisal if it was the exact house I wanted in the exact area that I wanted. So what if I'm $5K or $10K "upside down" in a home that I plan to live in for the next 20 years? I'd rather get the home that I want instead of settling for something that isn't perfect.
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Old 05-01-2015, 08:23 AM
 
Location: Greater NYC
2,907 posts, read 4,926,377 times
Reputation: 3872
Quote:
Originally Posted by mark311 View Post
And yes, I would pay over appraisal if it was the exact house I wanted in the exact area that I wanted.

Yes, exactly. Especially if you've lost out on on several other homes in a particular area in this market and the market is passing you by. Most who are looking to buy are serious -- by definition -- and if you are "serious" about purchasing a home asap in your preferred area, with you preferred reqs, you will not just wait around for your luck to change or the right one as others in this thread suggest. The right one for most people is in a certain area... it's not as simple as 'look elsewhere'.

But, this is additional support for the topic at hand -- Steve's point is critical.
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