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.
well, if it does not appraise, the appraiser still gets paid as does the inspector and the buyer is out these fees.
The loan officer does not get their commission, two real estate agents don't either, the buyer may walk, the seller keeps showing, the closing lawyer does not get his fee. It seems the appraiser has alot of power and control. Some might have an ego and they get a thrill out of "under", they got paid who cares about all the others.
offer #2, say 3 weeks later, maybe at the same price but a different lender, gets a different appraiser who may not agree at all with the first appraisal, if he had access to it which he would not.
I'm curious to know what you think the actual job of the appraiser is and who they are performing that job for?
There are the random crusaders out there, appraisers on a power-trip........but no more so than any other industry with their characters.
I'd like to ask the OP a question. Let's say you are under contract and you hire your home inspector. You and your agent meet the inspector at the house and he/she spends 5 hours going thru the home, testing systems, and writing up a 5 - 10 page report. In that report is information that convinces you not to buy the home.......the HVAC is on the brink of collapse, the house's foundation will require jacking up and reinforcement in the next couple of years......and the wiring is out of date - a real fire hazard.
Are you going to pay the home inspector? Or do you thing you shouldn't have to because no one else is getting paid?
How is that different from an appraiser? Just because you aren't at their side while they work, doesn't mean they didn't invest a lot of time into the appraisal report. A report that is for the bank, by the way. The bank that is loaning you the money.......the bank's security if you don't pay.
well, if it does not appraise, the appraiser still gets paid as does the inspector and the buyer is out these fees.
The loan officer does not get their commission, two real estate agents don't either, the buyer may walk, the seller keeps showing, the closing lawyer does not get his fee. It seems the appraiser has alot of power and control. Some might have an ego and they get a thrill out of "under", they got paid who cares about all the others.
offer #2, say 3 weeks later, maybe at the same price but a different lender, gets a different appraiser who may not agree at all with the first appraisal, if he had access to it which he would not.
And what does any of that have to do with the bank protecting it's interest on the loan that is being requested? Or do you think the bank should just give out loans without any consideration to the asset that is securing the loan?
1. what % of appraisals go under the agreed on price of a house?
2. do appraisers know the loan amount, or maybe when they arrive they see a for sale flyer out front, etc.
It sure would be nice if they were paid based on number of loan approvals, since many buyer-seller mutual agreements are affected.
I have to assume my buyer and their agent, discussed all aspects of their offer. If they want the house and they wanted their offer accepted, which it was, they must be hoping, like I am, that the appraisal comes in good.
I doubt they care if the agreed on price is "X" dollars and the appraisal is $2000 less.
I have not read any of the other posts so I don't know if this has been addressed yet.
Yes, we know the purchase price because FNMA requires us to analyse the contract to ensure it is an arms-length transaction and that there are no extra-ordinary concessions.
We are dis-interested 3rd parties and really don't care what the sales price is. And of course we should not be paid based on the amount of loans that are closed. Something similar took place in the past (LOs having their pet appraisers and those appraisers making sure the appraisal "made" so they could count on additional orders from that LO) and clearly that didn't work. It is one of the reasons the housing market is in the mess it is in today.
what doesn't happen often? appraisals coming in too low?
That comment about them being paid that way was 99% a joke.
I've got a happy buyer and I'm the seller and we have to both hope the appraisal comes in good.
And as an agent told me, the lender could send out 3 appraisals over 3 days and all 3 would be different numbers. So our appraiser may fall short, and if there was another one done the next day by another appraiser he might appraise it higher.
Alot of "opinion" on the part of appraisers if no two alike.
I was told they only "look".
If they have to open a cabinet or door to "look" they do. I was told they don't really "test" anything, that is left to the inspector.
Let me tell you a true example of how opinions are a big part of an appraisal. I was mildly interested in a house. The seller had a price and for an extra $7000 they would hire a cew to fix a long list of things that were wrong. I went to my bank for a letter of approval and told the loan agent about some of the issues I saw. He called and got an FHA appraiser to go out at no charge, and look and see.
He came back with this report.
one cracked window needing replaced
post to support corner of garage over hang missing.
chimney flashing needs replaced
AND.....drum roll....TRUE........a 6 foot vertical crack in the back exterior brick wall wide enough to get your little finger in it....
He said he would let that pass as "cosmetic"
I had to pass on the house as there were many other issues.
And the loan officer said the random chance of getting that same appraiser for a "cosmetic 6 foot crack in the brick wall" was unlikely.
Any idea why he's let something that bad go as cosmetic?
Did he have some "motivation" to let such a thing "slide by"?
Considering what you paid, I'd say you got your moneys worth. I never inspect anything without an engagement letter from the lender and I NEVER work for free. And for the record, FHA requires photographs of all exterior walls of a home so the 6 foot crack probably wasn't going to pass as "cosmetic".
Considering what you paid, I'd say you got your moneys worth. I never inspect anything without an engagement letter from the lender and I NEVER work for free. And for the record, FHA requires photographs of all exterior walls of a home so the 6 foot crack probably wasn't going to pass as "cosmetic".
I'm curious to know what you think the actual job of the appraiser is and who they are performing that job for?
By their agent telling my agent that they were going to switch from FHA and 3.5% down, to conventional and 20% down, it told us, they have 20% cash on hand. They decided to only put 5% down, so going into some negotiation on an "under", WE know that have 15% of the offer price in their pocket. Thus we might be able to push a little harder than if they were only getting paychecks.
From what I know, the appraiser is to determine if the amount of the loan matches the value of the house. The bank won't loan $200,000 on a $180,000 house. The seller must come down, buyer pay the difference, or they negotiate in the middle.
If the buer walks because they think the seller tried to cheat them by agreeing to their offer of 200 on a 180 house, or they walk for any other reason, then the seller now knows it appraised for 180, and they may get 180 the 2nd time around. However, the next offer may be a different bank and a different type loan and a different appraiser.
My agent said you could send out appraiser Mr. Jones on Monday and he come $4000 under. You could then send out appraiser Mrs. Johnson to the same house on Tuesday and they could appraise it $3000 over.
My lookers were in a hurry. The found the house on the internet on June 24th, viewed the 25th, offered the 26th and changed their loan type on the 28th.
Their home inspector was MY agent's regular inspector as their agent asked for a referral. He found the need for some GFCI outlets, toilet bowl leak needing a new wax ring, and that is it. The termite inspector for the bank found no termites but he found 22%-25% moisture readings and he differed greatly on moisture than the home inspector who found a range of 8-15%. The termite inspector told my agent he has found most of his houses to have readings around 25%. My agent says his meter is wrong and they spent 3 hours on it and even called Clemson Univeristy. My agent asked him, Paul, if all your houses are 25% moisture levels, doesn't that tell you something? With the top of the range being 30% or 40%, 25% would mean rotten wood at all his houses, and that is not the case.
It was funny, a real estate forum member (a pro) told me point blank that moisture readings have zero to do with the buyer, seller and agents. What a joke. The inspection reports go to the agents and the buyer and seller must agree on what is to be fixed or not, so yes, inspection reports and "moisture readings" are meaningful to buyer and seller and agents.
My house has appraised and closing is July 20th, 26 days after they viewed it. As sellers, my agent and I will never know the number of the appraisal, but the buyers will.
Hopefully it was slightly over so I did not leave money on the table by taking the first offer. And my house with the new asking price was only out there for 1 day before the buyer viewed it, so the price never got a chance to get other offers. It was a clean offer, they offered 5.7% under the asking price and they asked for 0 toward closing cost. That was it. They asked for the refrigerator. Their agent told them not to ask for the washer and dryer, so as not to "push it". I had to get 6 GFCI outlets $60, $30 to replace 4 pieces of shingle, a new crawl space door ($25) and a new toilet wax ring. My agent says it was one of the cleanest offers she's seen in a long time, that was not cash.
If I am a buyer, yes, I will want to be there at the inspection, and see the report and let my magnifying glass inspect it.
So, I am out of sell mode and into buy mode.
Thanks to almost all of you on this thread and others, and then to a small few, try to be more pleasant in your comments.
A innocent lady asked how long it should take for an offer to come in and the first answer she got was "one day to one year, maybe two years.
Slightly rude and sarcastic answer that the OP did not deserve.
From what I know, the appraiser is to determine if the amount of the loan matches the value of the house.
The appraiser doesn't care what the loan amount is........it's totally irrelevant. An appraisers job, in a mortgage finance transaction appraisal, is to determine an opinion of the market value only. It is the banker who determines if sufficient collateral exists to extend a loan.
The appraiser doesn't care what the loan amount is........it's totally irrelevant. An appraisers job, in a mortgage finance transaction appraisal, is to determine an opinion of the market value only. It is the banker who determines if sufficient collateral exists to extend a loan.
ok....thanks.
The way my agent said it....the bank will only loan the amount of the appraisal - market value based on the appraisal.
We knew before we accepted the offer, they had financing for the "asking price", but I accepted their offer 5.7% below.
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.
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.
