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I think some of us miss a few things about the Dallas RE markets.
Homes, sans problems, over about $750 are selling just fine.
Apparently appraisers will not, for reasons I do not know, make upward market adjustments with out the adjustments being paid for with cash - just as the OP is experiencing.
I'm guessing the home the OP referenced will be sold for pretty close to what the sellers are asking.
Apparently appraisers will not, for reasons I do not know, make upward market adjustments with out the adjustments being paid for with cash - just as the OP is experiencing.
...
Can you clarify exactly what you're talking about here?
Apparently appraisers will not, for reasons I do not know, make upward market adjustments with out the adjustments being paid for with cash
the appraisers are not making the payments--they don't care if the house sells or not--
the price the appraiser was short of was a 2009 selling price--I assume since the house was new it required an appraisal for the mortgage as well at that time--so the 09 appraisal came in at that price or above
it is the 2011 appraisal that won't meet the 2009--ther is no "upward" market increase--
the appraiser is downgrading the value of the house to below 2009 standard--
and that might well be true
but I know that in Tarrant side--there has been market appreciation that has shown up in appraisals and higher mortgage amounts
so some appraisers are willing to increase current market value over past value
The ugly part of real estate market is starting to hit now. Houses are being appraised using comps that are not really comps and the market is dropping like a rock. I drove around my neighborhood yesterday and checked sales prices on similar properties and almost identical houses are being offered for 225,000 to 450,000. Last year all the sales were between 325,000 and 450,000. The foreclosed homes killing the market were the ones bought within the last five years or refinanced.
Apparently appraisers will not, for reasons I do not know, make upward market adjustments with out the adjustments being paid for with cash
the appraisers are not making the payments--they don't care if the house sells or not--
the price the appraiser was short of was a 2009 selling price--I assume since the house was new it required an appraisal for the mortgage as well at that time--so the 09 appraisal came in at that price or above
it is the 2011 appraisal that won't meet the 2009--ther is no "upward" market increase--
the appraiser is downgrading the value of the house to below 2009 standard--
and that might well be true
but I know that in Tarrant side--there has been market appreciation that has shown up in appraisals and higher mortgage amounts
so some appraisers are willing to increase current market value over past value
We won't know if the appraiser should have made an upward market adjustment or not for certain until that home sells. If it sells for over the appraisal that is a strong indication the appraisal was low either because of a mis-appraisal or because the appraiser would not or could not make an upward market adjustment relative to the comps.
If upward adjustments were not made due to market conditions and sales prices the appraisal on my home from 1967 would still be valid. The 2009 selling price re. the home above is not a part of my thinking at all.
I've seen six homes in my neighborhood sell over appraisal in less than a year. i bought one of those six. In my neighborhood and many others around town sellers have learned that appraisals mean less than in the past. One of these homes, not mine, sold for almost 10% over appraisal.
Just being honest some neighborhoods in Dallas are doing fine some are not.
Almost forgot, last July we sold our home in Plano for over appraisal as well, about 1.5% over and we sold our house in about a week. Why? The house was absolutely perfect in every function. I cleaned the exterior brick. Mowed 2x per week. I kept the house cold with all other blinds/shutters/curtains open. I kept the pool running making as much splashing and gurgling as possible. I cleaned most of the windows everyday. i think a lot of homes that sit are physically substandard or as in the case of some friends in Plano their home is priced at market and they won't budge - but the house needs $75/100K in "visual" updates. No one with a functioning brain stem is going to pay market for a $600k home that needs a $100k in updates. This sort of thing happens all the time.
I think everyone needs to relax a little about home prices especially around here. We have a steady influx of people. Nicer apartments are nearly at capacity - meaning there is not a gross housing oversupply supply as in Phoenix and LV. Let's see what happens during the summer.
RE--We won't know if the appraiser should have made an upward market adjustment or not for certain until that home sells.
Even then we don't know -- because time will pass--the market could deteriorate even more than it has done--the owners could fail to maintain and sell after the house has been neglected--
there is really no way to know exactly if that appraiser made a mistake --
even a second appraisal for higher valuation might not be accurate--it could be too high
Market price and appraisal don't always coincide--
sounds like all the appraisals that were done in your neighborhood actually fell shot if people were willing to pay more than the appraised value of the home
the fact is that what you did to your house has absolutely nothing to do with how an appraiser would evaluate the home--
it might make the buyers willing to pay MORE than the appraisal--but that also means they have to come up with the difference between the bank's authorized mortgage amount and the contract price...some people can do that and are willing to and some people aren't
we actually paid more than our appraisal showed our Hurst house was worth--the intangibles in that included having a flat lot w/great deal of privacy vs having an interior lot with lot of overlook like other homes had or backing up to lights at softball field/park that our neighborhood borders
the appraiser valued the lot based on price per sq ft--ours is larger sq ft--but it is still priced the same per ft as any other lot in neighborhood--not because of factors we deem more valuable
our foundation is also a piered beam slab vs just a post tension slab--
as long as both are in functional condition for an appraisal both count the same to an appraiser--
but one is more expensive to build and to us was a better choice
there are intangibles that basically have no bearing on an appraisal that can weigh more for a buyer--
but you as the buyer set those values--not an appraiser
if someone does not feel comfortable doing that in this market--then they should move to another house
What was the source of the square footage used on the listing? We (Realtors) are supposed to use the tax records, or appraisal only if we have a copy of it, builder's plan, and if none of these, have to explain the source of the number posted. The appraiser had to measure the house and they make mistakes, rarely though. I think you would be wasting money getting it measured again, unless you feel that the appraiser's number is erroneous.
Naima
I've seen appraisers be off on square footage. The last one we had was WAY OFF! When he came back and remeasured and explained to me how he measured......... he had a way of measuring that was idiotic at best. He left off a whole entire bathroom, large utility room, three hallways, second staircase and even got the garage wrong Then again, the guy wanted to argue w/ me on the phone when he called to set up the first appointment when going over the house. He kept saying 2 or 3 car garage and I kept telling him EIGHT! He didn't believe me He told me, "no one has an eight car garage". Right-o there buckaroo On his remeasure he actually got a lot closer to the actual square footage and close to the last 2 before him from previous appraisals.
Quote:
Originally Posted by TurtleCreek80
Well, the problem with the new mortgage rules are that appraisers are randomly assigned....so perhaps some dude who's spent his entire career appraising homes in Desoto and Duncanville is now called to Plano, Keller, south Arlington, Preston Hollow, Stevens Park, and Mesquite in the same week. The appraiser now has less expertise than he did before and isn't able to measure the "intangibles" like original builder's reputation (imagine someone who has only appraised the Dines & Krafts and Hutsels in Lakewood trying to make sense of Pulte, Darling, etc), traffic patterns, school quality trends, prestige of address, whether a front garage is an asset or a detract in that particular neighborhood, etc. They now really only have $/sf to go on, which doesn't always tell the whole story, particularly in older neighborhoods where there are a lot more data points to consider.
I hear the appraiser situation has gotten better since the new rules went into effect, but it's still not perfect. Know someone who bought a home on Turtle Creek (the stretch south of Highland Park where there are only like 9 homes total) last summer/fall. The appraiser had never appraised homes in the area and just took a straight $/sf to get to his number- didn't take into account the specialness of a creek frontage lot with over an acre lot (very rare in 75219!), unobstructed downtown views from 2nd floor, etc. The contract was about $100-200k off the $1.something appraisal price so the buyer had to bring another large check to closing. This is pretty common in the higher end markets right now where there aren't good enough comps for special/unique homes and lots.
All that to say- I wouldn't say I'd "never" pay above the appraised price. That depends on who the appraiser was and how they arrived at the number. It all just comes down to how much you love the home, how long you intend to be there, and whether or not you think you can find something else you like easily. If I were buying a really special home on a special lot in Lakewood and planned to be there forever, what's another $20k? But for a new construction home on an interior lot of a similar looking new home block? No way. Or for any home when I anticipate another move in less than 10 years? No way.
Agree completely. The appraiser situation is so far out of whack right now. When you have someone trying to give an accurate appraisal on a properties value if they are not familiar w/ the area, the builder, etc it really does not reflect the true value of the property.
RE--We won't know if the appraiser should have made an upward market adjustment or not for certain until that home sells.
Even then we don't know -- because time will pass--the market could deteriorate even more than it has done--the owners could fail to maintain and sell after the house has been neglected--
there is really no way to know exactly if that appraiser made a mistake --
even a second appraisal for higher valuation might not be accurate--it could be too high
Market price and appraisal don't always coincide--
sounds like all the appraisals that were done in your neighborhood actually fell shot if people were willing to pay more than the appraised value of the home
the fact is that what you did to your house has absolutely nothing to do with how an appraiser would evaluate the home--
it might make the buyers willing to pay MORE than the appraisal--but that also means they have to come up with the difference between the bank's authorized mortgage amount and the contract price...some people can do that and are willing to and some people aren't
we actually paid more than our appraisal showed our Hurst house was worth--the intangibles in that included having a flat lot w/great deal of privacy vs having an interior lot with lot of overlook like other homes had or backing up to lights at softball field/park that our neighborhood borders
the appraiser valued the lot based on price per sq ft--ours is larger sq ft--but it is still priced the same per ft as any other lot in neighborhood--not because of factors we deem more valuable
our foundation is also a piered beam slab vs just a post tension slab--
as long as both are in functional condition for an appraisal both count the same to an appraiser--
but one is more expensive to build and to us was a better choice
there are intangibles that basically have no bearing on an appraisal that can weigh more for a buyer--
but you as the buyer set those values--not an appraiser
if someone does not feel comfortable doing that in this market--then they should move to another house
Am I not allowed to write about several different items impacting home sales prices? My thesis is that some people think appraisals set the selling price. i don't agree with that notion and evidence shows I'm right.
Yes they can be off on the square footage - I've seen it before.
If you think this is bad, you should see some of the almost-amateur appraisers working for the county!
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Then again, the guy wanted to argue w/ me on the phone when he called to set up the first appointment when going over the house. He kept saying 2 or 3 car garage and I kept telling him EIGHT! He didn't believe me 
He told me, "no one has an eight car garage". Right-o there buckaroo 
Agree completely. The appraiser situation is so far out of whack right now. When you have someone trying to give an accurate appraisal on a properties value if they are not familiar w/ the area, the builder, etc it really does not reflect the true value of the property.
