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Old 02-03-2019, 10:55 AM
 
17,160 posts, read 18,516,755 times
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Quote:
Originally Posted by Diana Holbrook View Post
I see them as slightly more valuable than BS, they are an educated third opinion that the price being paid is a reasonably defensible price they might likely be able to get back if things go south on them and they need to sell it again. In something as subjective as Real Estate value, that's as good as you're going to get.
Ok so explain this.

If I make a cash offer I guarantee you that the appraisal which is the cornerstone of every RE deal will go right out the window. And have you ever heard a agent argue the cash offer up to a loan contingent offer? No. Because at that point agents start arguing the no contingency cash offer and how it’s a good deal. It’s a good deal because the sale is gonna happen with less issues. Their commission loss is minimal. The only person talking a lot less is the seller. Im not gonna go into the duty to sell for the highest price. Agents are just gonna put it on the seller to make the decision. Easier to justify it that way. Why are cash deals sold at a lower price? Because the guy with the money sets the price. Not some “expert” appraiser

My mom was selling a house once and the agent “suggested” she take the lower offer. I asked if the agents are willing to make up the loss from their commissions. A nice tap dancing routine ensued. So why would my mom have to take a loss on the sale? My mom held on and sold later with a different agent for 15k more than list. Buyer came up with the additional cash out of pocket.

6 years ago I looked at a house. I offered $420,000. House was not in great shape. During insoection come to find out it needed a lot of work. A lot of work. Appraisal came in at amazingly surprised.....EXACTLY my offer price. Long story we walked after inspection. It was literally lipstick on a pig. Just some highlights. Drywall around the house was wet 2 feet up from slab. Plumbing in half the house leaking or not working, roof missing a 10x10 section (the realtor had the gall to say that’s how it’s supposed to be for the AC. So where was the AC? On the side of the house with it’s aluminum coil liberated. So new ac and furnace for sure. The pool guest house was FULL of black mold and not permitted. Probably 3-5k to demo and haul. The pool was green and needed resurfacing. 10-15k The electrical panel was a absolute mess with doubled up circuits. There’s 3k . The kitchen cabinets were falling apart swelled up. So say 50k not counting appliances. It was a large kitchen. The big stove was gone. A $200 clearance stove was installed. Buy hey I got new white paint EVERYWHERE. And I mean that in every sense of the word. The walls and trim all cabinets were the same apartment white color. But at least the carpet was bargain basement clearance isle carpet.
Recently the same house came back up for sale at $600,000.
We looked at it in a open house. The ONLY changes were front yard had different flowers and a big wooden bleacher type set up was removed. A few small repairs. The house exterior and 95% of the interior looked the same as when we looked at it. For all purposes the house really had a few thousand dollars in “improvements”. That’s it. Same cabinets same paint. The guy did paint the trim a gloss white. I’m sure he sanded and prepped the cabinets and trim.
That house when I looked at it I estimated 100,000 in costs to fix.

There was nothing of value added to the house. There isn’t 180,000 in added value other than the house prices going up.
Don’t get me wrong I understand that demand drives pricing, but we’re talking about appraised values. Which like you said it’s a guess. A biased one at tat. Nothing more nothing less.



The only reason for the appraisal is to make everyone in the transaction feel like what they’re paying for is worth that amount. That’s why I laugh at emphasis placed on appraised values.

Last edited by Electrician4you; 02-03-2019 at 11:49 AM..
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Old 02-03-2019, 11:15 AM
 
4,156 posts, read 1,794,543 times
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Quote:
Originally Posted by Electrician4you View Post
Ok so explain this.

6 years ago I looked at a house. I offered $420,000. House was not in great shape. Needed a lot of work. Appraisal came in at EXACTLY my offer price. Long story we walked after inspection.
Recently the same house came back up for sale at $600,000.
We looked at it in a open house. The ONLY changes were front yard had different flowers and a big wooden bleacher type set up was removed. A few small repairs. The house exterior and 95% of the interior looked the same as when we looked at it. For all purposes the house really had a few thousand dollars in “improvements”
There was nothing of value added to the house. There isn’t 180,000 in added value other than the house prices going up.
Don’t get me wrong I understand that demand drives pricing, but we’re talking about appraised values. Which like you said it’s a guess. Nothing more nothing less.

If I make a cash offer I guarantee you that the appraisal which is the cornerstone of every RE deal will go right out the window. Why are cash deals sold at a lower price? Because the guy with the money sets the price.

The only reason for the appraisal is to make everyone in the transaction feel like what they’re paying for is worth that amount. That’s why I laugh at emphasis placed on appraised values.

Three words will explain the above:


Real


Estate


Bubble


Next question, please!
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Old 02-03-2019, 11:22 AM
 
Location: Middle of the ocean
29,352 posts, read 18,601,946 times
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Housing prices go up, and just because they are asking 600K, doesn't mean the appraisal will support that amount.

My house was old and bust up and it doubled in in value in 10 years, with few improvements.
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Old Yesterday, 04:43 AM
 
8,679 posts, read 7,672,356 times
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Quote:
Originally Posted by Persian Prince View Post
Since I’m unable to post photo documents of several examples I will write it out:

9023 Langdon Ln

Assessment year 2018

Assessed value Total $150,000

Market Value Total $150,000

List price $249,000 ————> $229,000 decreased
Assessed value has nothing to do with market value, it is for taxation purposes only.

When you say market value is $150,000, what do you use to determine this. That is the question.
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Old Yesterday, 10:28 AM
 
Location: Rochester, WA
4,406 posts, read 2,408,184 times
Reputation: 12374
Quote:
Originally Posted by Electrician4you View Post
Ok so explain this.
I will try my best

Quote:
If I make a cash offer I guarantee you that the appraisal which is the cornerstone of every RE deal will go right out the window. And have you ever heard a agent argue the cash offer up to a loan contingent offer? No. Because at that point agents start arguing the no contingency cash offer and how it’s a good deal. It’s a good deal because the sale is gonna happen with less issues. Their commission loss is minimal. The only person talking a lot less is the seller. Im not gonna go into the duty to sell for the highest price. Agents are just gonna put it on the seller to make the decision. Easier to justify it that way. Why are cash deals sold at a lower price? Because the guy with the money sets the price. Not some “expert” appraiser
Sorry, you lost me already... In cases of competing offers, we help clients weigh a cash offer versus a financed offer ALL THE TIME. Sometimes the decision is not simply about the amount or the financing. A financed offer from a strong buyer with solid financing from a lender I trust is not really any less likely to close than the cash buyer, and if the amounts aren't a LOT different, sometimes the decision rests on other factors, such as the other contingencies and timelines involved in the transaction.

I have certainly seen cash buyers who actually bid the price up above the financed buyer, but were a complete pain in the rear on inspections, so let's not pretend it's always a cake walk with a cash buyer. Midway through a recent transaction, our sellers wished we'd have gone with the other guy with the lower price, VA loan, but much more reasonable attitude. With a similar timeline and a solid, qualified buyer, financed is just as good as cash to most sellers, on most homes that are in pretty good condition and reasonably priced.

Quote:
My mom was selling a house once and the agent “suggested” she take the lower offer. I asked if the agents are willing to make up the loss from their commissions. A nice tap dancing routine ensued. So why would my mom have to take a loss on the sale?
Biggest reason is because it's her house. That's why the decision rests with your mom. Glad it worked out well for her to hold out... predicting the future is the hardest part of these decisions, for everyone.

You seem, in the same post, to be blaming the realtor for both making recommendations, AND leaving the decision up to the seller. No real way to win that one with you is there?


Quote:
6 years ago I looked at a house. I offered $420,000. House was not in great shape. During insoection come to find out it needed a lot of work. A lot of work. Appraisal came in at amazingly surprised.....EXACTLY my offer price.
Not a surprise at all, really. Appraisers have your contract in front of them. They're there to look and confirm the price is reasonable, they don't go in blindfolded.

Quote:
Long story we walked after inspection. It was literally lipstick on a pig.
There's a lot of pigs with lipstick on in this business. That's why inspection is important.

Quote:
The only reason for the appraisal is to make everyone in the transaction feel like what they’re paying for is worth that amount. That’s why I laugh at emphasis placed on appraised values.
Buyers usually don't know how to even read the appraisal report or understand it. Appraisal is for the bank loaning the money. The guy behind the desk has never been to the house, he wants a second opinion on whether it's worth the money they're lending. That's all.... No more or less.

My two cents.

Last edited by Diana Holbrook; Yesterday at 11:22 AM.. Reason: Corrected major typo. :)
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Old Yesterday, 02:47 PM
 
Location: Grosse Ile Michigan
25,498 posts, read 60,946,534 times
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Our assessed value is generally a little below half of the market value of the home. So here you will see most houses at double or more of the assessed value.
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Old Yesterday, 05:40 PM
 
68 posts, read 16,714 times
Reputation: 89
Quote:
Originally Posted by Electrician4you View Post
Ok so explain this.

6 years ago I looked at a house. I offered $420,000. House was not in great shape. During insoection come to find out it needed a lot of work. A lot of work. Appraisal came in at amazingly surprised.....EXACTLY my offer price. Long story we walked after inspection. It was literally lipstick on a pig.
Literally? LOL! You should've offered about $600. Plus the price of the lipstick.
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Old Today, 12:09 PM
 
Location: Loudon, TN
5,229 posts, read 4,455,133 times
Reputation: 17501
Assessed value has nothing to do with appraised value/market value. Every state and city/county have their own formulas for assessment, and it's all for the purpose of taxation. It has zero to do with what the home will sell for. I sold one of my 2 homes. It was assessed at half the sale price. The home I live in, in another state, is assessed at one fourth the market value.
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