U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > U.S. Forums > North Carolina > Charlotte
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 03-09-2010, 04:38 AM
 
Location: Charlotte, NC
7,041 posts, read 13,102,313 times
Reputation: 2323

Advertisements

Quote:
Originally Posted by Keith Roe View Post
Not enough information. If the appraisal is $35k off of contract price, I would say go back to the bank and negotiate. The bank will want a new appraisal.

I would be curious as to what homes were used in the comp. Bank owned or forclosed properties should not be used as comps.

We do get this problem once in a while. Used to be the appraiser had the sale price and magically the appraised value matched the contract sale price.
that's not true. If the REO or foreclosure sales are the best comps and the most recent sales, then they have to be used.

the bank that you are buying the house from should adjust the purchase price lower due to the low appraisal.
Reply With Quote Quick reply to this message

 
Old 03-09-2010, 04:54 AM
 
604 posts, read 1,131,100 times
Reputation: 214
Is it $35k off of a contract price of $100,000 or $1,000,000?
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 05:00 AM
 
314 posts, read 422,275 times
Reputation: 103
Quote:
Originally Posted by Keith Roe View Post
Not enough information. If the appraisal is $35k off of contract price, I would say go back to the bank and negotiate. The bank will want a new appraisal.

I would be curious as to what homes were used in the comp. Bank owned or forclosed properties should not be used as comps.

We do get this problem once in a while. Used to be the appraiser had the sale price and magically the appraised value matched the contract sale price.
That is what I thought Keith. Isn't the Appraisal Contigency in the purchase contract suppose to protect her from this?
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 05:09 AM
 
Location: South Charlotte
1,435 posts, read 5,220,197 times
Reputation: 486
Is this by chance a Fannie Mae property?
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 06:15 AM
 
Location: Union County, NC
1,891 posts, read 5,545,691 times
Reputation: 749
Bank owned and foreclosed properties are significantly affecting the market value of homes in certain areas and neighborhoods and ARE used by appraisers in those instances. After all, an appraisal is an opinion of the value of the home at a certain point in time. If there are many distressed sales/active listings in a neighborhood at that point in time it would absolutely affect market value.

If I have a buyer in one of those areas I would certainly use that information to try to negotiate a lower price on a home, whether it's a distress sale or a private seller.
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 06:44 AM
 
Location: South Charlotte
1,435 posts, read 5,220,197 times
Reputation: 486
The magic number is 25-30% of market activity according to every appraiser and 3rd party valuation source I've spoken to. Including a very good friend of mine who is an appraisal auditor at BofA.

If the market activity similar to the subject or in the same neighborhood as the subject contains 25%-30% or more of distressed sales then they must be used as comparables.
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 06:48 AM
 
604 posts, read 1,131,100 times
Reputation: 214
What about corporate relocations?
They generally go for below market.
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 07:23 AM
 
314 posts, read 422,275 times
Reputation: 103
We have a lot of good agents on this board that really understand what is going on in the real estate market. Why can't I run into one of you guys as the seller's agent. Seems the seller agents that I have been running into are very unrealistic in today's market.
Reply With Quote Quick reply to this message
 
Old 03-09-2010, 11:51 AM
 
83 posts, read 413,575 times
Reputation: 75
We purchased a foreclosure in April 09 and it appraised for $20k less than our offer. We also were ina bidding war (there were 3 offers on the house) and we won it. Since our contract stated that we'd onyl pay the appraised price, the bank reduced the price to the appraised value. The house was originally on the market for $255k, we over bid to $268k to beat out the other bids, then the house appraised for $248k. So we beat out the bids and got the house for under what the bank wanted. The bank didn't fight with us on it at all. The just accepted the appraised price.
Reply With Quote Quick reply to this message
 
Old 03-10-2010, 06:50 AM
 
Location: Fort Mill
103 posts, read 216,452 times
Reputation: 70
Always be cautious when working with a realtor's 'preferred' lender. I think it makes for strange bedfellows and a conflict of interest, frankly. It's why I also do not use a buyer agent from the same firm that has the listing--major conflict of interest, IMO, regardless of what they tell you.

Never shop your lender just because an appraisal comes in lower than you think. It won't work anyway, because if an appraisal has been done recently (I forget how many months come into play here), it will be taken into consideration. I'm not a realtor, but I remember something about this coming up once before in a deal I did. Any agents/appraisers/lenders wanna chime in here?

If you're buying an REO/foreclosure/short-sale/etc., there is no reason why it would be unreasonable to use other REOs/foreclosures/etc. as comps. They should be comperables, IMO. It's just logical. I would say that if you are buying a non-distressed property, your appraiser should try to find non-distressed comps. I don't know if they're required to abide by these guidelines.

I agree with the others that you should get the bank to come down on their price. Your agent should already be doing this for you; otherwise, what is the point of having representation? I'm always frustrated by the number of buyers out there who stress out over some situation or another that inevitably arises during the course of a transaction, when their agent should be holding their hand throughout this process and doing everything in their power to smooth out the bumps. That's what they're there for. They're not doing you any favors--it's their job to make this happen. Make your agent earn his/her commission.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:



Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > U.S. Forums > North Carolina > Charlotte
Similar Threads
View detailed profiles of:
Follow City-Data.com founder on our Forum or

All times are GMT -6. The time now is 05:06 AM.

2005-2019, Advameg, Inc. | Please obey Forum Rules | Terms of Use and Privacy Policy

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top