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Old 11-17-2017, 09:52 AM
 
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Quote:
Originally Posted by lvmensch View Post
If the place is old and beaten up the appraiser favors the seller. If nice and shiny and well maintained the appraiser favors the buyer.
Why is that? You'd think it'd be the opposite.
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Old 11-17-2017, 10:42 AM
 
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Quote:
Originally Posted by foundapeanut View Post
Why is that? You'd think it'd be the opposite.
Classical appraisals compare to the mean similar house. They then attempt to correct for the state of the comp versus target house. They generally end up with the correction too small. Flipped houses for instance will often refuse to deal with VA or FHA as they cannot get them to appraise. Some rationality to this. For instance home improvement generally get discounted heavily with respect to cost versus increase in value. A swimming pool will add maybe 1/3 its cost to the value of a home.

So basically there is a tendency for the appraisal value to be closer to the mean house than the target.
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Old 11-17-2017, 10:44 AM
 
Location: Las Vegas
534 posts, read 426,467 times
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Quote:
Originally Posted by foundapeanut View Post
Why is that? You'd think it'd be the opposite.
I imagine it's because the purpose of an appraiser is to justify to the lender the use of this particular piece of real estate as security for the loan. Shiny pieces of real estate result in higher appraisals, so the lender is more willing to accept it as collateral. Dumps mean the buyer is going to have to pony up more cash because the appraisal comes in low and the loan amount the lender is willing to extend won't cover the entire purchase price.
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Old 11-17-2017, 10:55 AM
 
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Quote:
Originally Posted by LVAllen View Post
I imagine it's because the purpose of an appraiser is to justify to the lender the use of this particular piece of real estate as security for the loan. Shiny pieces of real estate result in higher appraisals, so the lender is more willing to accept it as collateral. Dumps mean the buyer is going to have to pony up more cash because the appraisal comes in low and the loan amount the lender is willing to extend won't cover the entire purchase price.
Actually appraisal for mortgages come out differently than non loan appraisals. Loan appraisals tend to come out right on or within a few thousand of the contract price. Valuation loans for other purposes behave differently and tend to lean a bit toward the value of the mean comp rather than the target.

It is not a precise science. We were the agent for one home in Sun City Summerlin that appraised almost 20% different in two appraisals a month apart. Issue was the value of a large but hilly lot.
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Old 11-17-2017, 11:47 AM
 
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We spoke with a lender yesterday who valued the house at $290K. We are going to pre-approved and he will submit an offer for less. We do have a realtor who we have known for years and gave her many referrals so she is willing to help as much as possible for really no extra cost besides the costs we would have to pay. The lender is also her friend so I hope we are in good hands!!
We also keep the house looking nice and keep up on landscape work, I do not want to live in a dump lol..
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Old 11-18-2017, 06:43 AM
 
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LV Allen has it 100% correct. Keep in mind if your friend guides you, that is fine as you are not required to use an agent. But be aware of a number of pit falls, have a good sales contract and one that protects you if the lending is declined at the last moment allowing you to obtain your deposit back.
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Old 11-18-2017, 11:38 AM
 
Location: Here and there, you decide.
11,575 posts, read 22,673,604 times
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Quote:
Originally Posted by aamlin View Post
We spoke with a lender yesterday who valued the house at $290K. We are going to pre-approved and he will submit an offer for less. We do have a realtor who we have known for years and gave her many referrals so she is willing to help as much as possible for really no extra cost besides the costs we would have to pay. The lender is also her friend so I hope we are in good hands!!
We also keep the house looking nice and keep up on landscape work, I do not want to live in a dump lol..
of course, its no cost... the buyer doesn't pay the realtor fees... the seller does...
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Old 11-19-2017, 10:18 AM
 
Location: Paranoid State
12,672 posts, read 9,425,981 times
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I'm sure you already know this, but make sure you put in an inspection contingency even though you've lived in the home and presumably know it quite well. A good inspector can give you his/her opinion on things such as the remaining life of the roof, water heater, and HVAC among other things.

And make sure you get a home warranty at least for the first year from a company such as Old Republic Home Protection, or American Home Shield, or equivalent. Many people have had bad experiences with them, but they are better than nothing.

Quite literally, I closed on a vacation house (different state) and the water heater failed 2 days after moving in. I called the home warranty company, they sent out a plumber the next day with a new water heater, and after an hour or so installation everything was back to normal. The home warranty more than paid for itself right off the bat.
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