Phoenix Real Estate Market Update (heat pump, transfer, neighborhood)

[Captain Bill]

Originally Posted by Friend of Sonic

8547 E LAKEVIEW AVE MESA , AZ 85209-5205 sold at 142k and is listed at 1303 square feet according to the Bank of America's software I use to see the comps. But, I just took look at Zillow and saw they have the square feet at 1918, so that price makes a helluva lot more sense.

Now I'm thinking I better bail before I sign. Sigh.

EDIT: I sent my realtor an email explaining everything, and advising him that I'd be more than happy for the listing agent to speak to Fannie before I sign to negotiate a price that gives me confidence in the home appraising. But if not, I don't feel comfortable with the idea that Fannie will be willing to talk about price after I sign. Thanks Captain Bill and everyone else.

The Bank of America info appears to not be correct. However, the tax record shows 1303 and 1943. The mls listing sheet shows 1943 sf from an appraisal.

What happens sometime is a home, when it's being built, is reported to the tax assessor, and then the floor plan is changed so the square footage is different, and doesn't get reported. The appraisers make a sketch of the home and measure the square footage when they do an appraisal. So then you go with the appraised measurement.

Any time one makes an offer on an over priced home, they can consider adding a clause in the "Additional terms" section, that states:

"Purchase price shall be $xxx,xxx (the offer price) or the buyers lenders' appraisal value, whichever is lower".

[Friend of Sonic]

Originally Posted by Captain Bill

"Purchase price shall be $xxx,xxx (the offer price) or the buyers lenders' appraisal value, whichever is lower".

That sounds like a solid bet. But I'm still not willing to pay that price, should the appraisal actually come back that high (does that make me a cheap ass at that point?)

My realtor asked me a price point to send the listing agent to pitch to FNMA. I said 105,000 with 3% concessions. After concessions, that's putting me around 77 bucks a square foot. We shall see if FNMA laughs in my face now.

[Captain Bill]

Originally Posted by ReadyFreddy

...I said I never met one who did anything based on Price/SF. It's not a metric they look at...

I'm not sure if we're having a semantic misunderstanding or what.

The appraisers do use square footage (Gross Living Area) of a home as one adjustment to the comps. I believe we agree on that.

My statement: "if one looks in the same community and the highest comp is $78.60/sf, the home priced at $95.86/sf is not going to appraise at that value", is saying the same thing but coming from the opposite direction.

The appraiser is working it from the different direction; taking the sold price and adjusting for the difference in square footage and other adjustments to arrive at an appraised value.

Whatever their appraised value is, then if that is divided by the square footage we see the price per square foot that the appraiser arrives at.

So in looking at comps, if a home is listed at $95/sf, and a comp in like condition is priced at $78/sf, the home is not going to appraise at $95/sf.

Appraisers are supposed to use the comps within a community first. If there are no similar comps within the community, then they can begin to spread out and look for "similar" properties in "similar" communities.

[Captain Bill]

Originally Posted by Friend of Sonic

That sounds like a solid bet. But I'm still not willing to pay that price, should the appraisal actually come back that high (does that make me a cheap ass at that point?)

My realtor asked me a price point to send the listing agent to pitch to FNMA. I said 105,000 with 3% concessions. After concessions, that's putting me around 77 bucks a square foot. We shall see if FNMA laughs in my face now.

Of course it does not make you cheap. Knowing the comps you wouldn't make an offer on an overpriced home unless you were willing to pay that price anyway.

In this market, offers should be made at or near the current market value, as determined by the recent comps. Remember that the sold prices on the mls are the contracted purchase prices. They do not consider the concessions in that number. Without contacting each buyer of a sold house, there is no way to know if there were any concessions.

Especially when homes are purchased for cash by investors. They will make their offer very clean (no concessions - no home warranty - no appraisal contingency) They know the current value and by making clean offer they're able to win their fair share of offers.

[Friend of Sonic]

They are saying I will have to make a whole new offer, which I'm afraid that I will get lost in the shuffle. I am wondering if I should "gamble" that the appraisal will come in lower and go with Bill's previous suggestion of writing in the additional terms that the purchase price is the one we agreed on, or what the lender's appraisal turns up, whichever is cheaper.

[Zippyman]

Originally Posted by Friend of Sonic

That sounds like a solid bet. But I'm still not willing to pay that price, should the appraisal actually come back that high (does that make me a cheap ass at that point?)

My realtor asked me a price point to send the listing agent to pitch to FNMA. I said 105,000 with 3% concessions. After concessions, that's putting me around 77 bucks a square foot. We shall see if FNMA laughs in my face now.

Or are you offering $55/sq foot if the house is actually 1900 square feet?

I can't believe you could make an offer without knowing how many square feet the house was. There's a huge difference between 1300 square feet and 1900 square feet.

Why are you doing your own "comps"?

Pending data is just as important as "sold" data, and it doesn't appear anywhere but MLS.

[rjrcm]

Originally Posted by Friend of Sonic

.... I am wondering if I should "gamble" that the appraisal will come in lower and go with Bill's previous suggestion of writing in the additional terms that the purchase price is the one we agreed on, or what the lender's appraisal turns up, whichever is cheaper.

You can try that, but it's very likely the bank will not agree to that term, and is also overridden by the bank's addendum. Bill's suggestion really applies to traditional sales where you may be able to negotiate such a term with the seller. But even then, most wouldn't agree.

[Friend of Sonic]

Originally Posted by Zippyman

Or are you offering $55/sq foot if the house is actually 1900 square feet?

I can't believe you could make an offer without knowing how many square feet the house was. There's a huge difference between 1300 square feet and 1900 square feet.

Why are you doing your own "comps"?

Pending data is just as important as "sold" data, and it doesn't appear anywhere but MLS.

That is a comp I looked up. I work for Bank of America, and we have access to software called that will provide me that in an easy to use manner. However, the quoted house for 1900 square feet was actually showing as 1300 square feet, which is a huge difference in price per square foot. It is not the house I am offering on.

Also, why is comps in quotes? Is there a more appropriate term I should use?

Additionally, please by all means correct me if I'm wrong, but pending listings will not going to tell me an accurate sale price, but rather the original listing price.

[Captain Bill]

Originally Posted by Friend of Sonic

...Also, why is comps in quotes? Is there a more appropriate term I should use?

Additionally, please by all means correct me if I'm wrong, but pending listings will not going to tell me an accurate sale price, but rather the original listing price.

Comps is the correct term. It's short for comparables.

Active listings show what the competition is asking for their home. It's good to look at them.

Pending listings show at what price the house was listed when it attracted an offer. You are correct that it only shows the listed price, and not the sold price. The sold price could be higher or lower.

Sold listings (the closer in time the better) are the most important because that is the final sale price. Again, it does not tell what concessions were included.

[Captain Bill]

Originally Posted by Zippyman

I can't believe you could make an offer without knowing how many square feet the house was. There's a huge difference between 1300 square feet and 1900 square feet.

The information he had actually showed the home to be 1300 sf. The imapp tax data also showed it at 1300 sf and that is probably where the BofA got the info.

The mls sheet, which he apparently didn't have, showed the square footage as 1943 by Appraiser.