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Old 05-26-2009, 07:40 PM
 
Location: N. Ga
3,756 posts, read 3,393,806 times
Reputation: 2141

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Hello all..

Here is the situation: Home in North Georgia.
List Price: 297,000
Sales Price agreed upon: 281,000

Everything on go, till today. 3rd party appraiser, out of Atlanta (2 hours away) appraised home at 251,000.

My questions:

1. Do you see many sellers who upon seeing the actual appraised value of their home, actually renegotiate? We obviously still want the house, but will not purchase for more than appraised value. We don't want to offend neither the seller, nor the listing agent, but to offer any more than appraised value just isn't a viable option for us.

2. Just out of curiousity, does anyone here have any knowledge of the North Georgia market? From all the comps we looked at prior to making our offer we just did not see the large percentage drops in value that this appraisal suggests.

3. If you were the selling agent--What would you tell your clients? I'm just curious if we will be wasting our time to pursue this any more, or if we should just cut our losses and move on?
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Old 05-26-2009, 07:49 PM
 
Location: OK
2,754 posts, read 6,607,861 times
Reputation: 1920
You may want to request a review. While the appraiser may be geographically competent, there is just as much chance that he/she isn't.

Yet another example why the HVCC is bad for consumers. Thanks, Mr. Cuomo!
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Old 05-26-2009, 10:00 PM
 
Location: N. Ga
3,756 posts, read 3,393,806 times
Reputation: 2141
I just got the hard copy of the appraisal... I'm even more confused.

He says it would cost 260,000 to build the house. When we got the insurance quote the insurance company said replacement cost would be 330,000.

I also have in my possession a copy of the county tax information. It says fair market value is 290,000.

I am so confused. I'm now 900 miles away, and trying to take care of this long distance is turning into a nightmare... not to mention I'm sure I'm not going to meet our closing deadline, which means I'll lose my locked interest rate.....

I'm ill......
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Old 05-26-2009, 10:18 PM
 
28,449 posts, read 72,803,430 times
Reputation: 18471
I find it very interesting that Schouse is, in this case, suggesting that current appraisal management companies are NOT producing valid results yet in other cases Schousse advocates an appraisal be order by buyers BEFORE making an offer...

That MANY appraisals ARE coming in LOW is a fact. There are not to many things to do about this, and it might not hard to ask for a review, but if that review is based on foreclosures that perhaps you did not consider as 'comps' are out there and ARE hurting buyers ability to get financing / sellers ability to get a fair price.

Whether I was representing the buyer or seller that info I would convey to them that in the current environment it may make sense to simply redo the contracts to match the appraisal. If that 10% or so gap does not cover the seller's amount owed perhaps the seller's lender should be approached and a short sale explored...
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Old 05-27-2009, 07:11 AM
 
Location: OK
2,754 posts, read 6,607,861 times
Reputation: 1920
Quote:
Originally Posted by chet everett View Post
I find it very interesting that Schouse is, in this case, suggesting that current appraisal management companies are NOT producing valid results yet in other cases Schousse advocates an appraisal be order by buyers BEFORE making an offer...
And this is mutually exclusive, how?

It is a well known fact that most AMCs shop around and send orders to those appraisers who will accept the lowest fee, also known as dialing for dollars. And, as with everything, you get what you pay for.

To have a pre-listing appraisal done you don't have to go through an AMC and can hire any competent, local, appraiser you want.
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Old 05-27-2009, 07:16 AM
 
Location: OK
2,754 posts, read 6,607,861 times
Reputation: 1920
Quote:
Originally Posted by aus10 View Post
I just got the hard copy of the appraisal... I'm even more confused.

He says it would cost 260,000 to build the house. When we got the insurance quote the insurance company said replacement cost would be 330,000.

I also have in my possession a copy of the county tax information. It says fair market value is 290,000.

I am so confused. I'm now 900 miles away, and trying to take care of this long distance is turning into a nightmare... not to mention I'm sure I'm not going to meet our closing deadline, which means I'll lose my locked interest rate.....

I'm ill......
None of the above approaches to value are suitable for lending purposes. The cost approach bottom line is the cost of replacement of the house AFTER DEPRECIATION. This cost approach is used for several purposes but is NOT suitable for insurance purposes.

County tax information may have, what they call, Fair Market Value listed but this is figured in a different manner than what an appraiser does for lending purposes.

My standard offer stands for you as well .... if you want to scan that appraisal report in and email it to me, I would be happy to take a look at it. While I am not geographically competent to determine if the vale is valid, as a Certified Review Appraiser I am trained to review an appraisal to see if solid appraisal practices were used and whether or not the report you have is credible.

For the mods .... I am offering this as a favor.
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Old 05-27-2009, 07:23 AM
 
65 posts, read 255,132 times
Reputation: 38
Happened to me, but on the other side (I'm the seller). The buyer demanded that we reduce the sales price, and we said no. We wouldn't sell it for the appraiser's value (would rather stay where we are, and we aren't in a position where we have to move). They "walked" about 10 days ago. I've already had another offer since and quite a bit of activity. But I guess the same thing can happen with another buyer ....
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Old 05-27-2009, 09:59 AM
 
982 posts, read 882,245 times
Reputation: 249
Not necessarily. Appraisers are all over the place, just like realtors, when it comes to valuing. It's a crapshoot.

Good luck!
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Old 05-27-2009, 10:07 AM
 
28,449 posts, read 72,803,430 times
Reputation: 18471
Default My point exactly!

Quote:
Originally Posted by MsFancyPants View Post
Not necessarily. Appraisers are all over the place, just like realtors, when it comes to valuing. It's a crapshoot.

Good luck!

The current situation with appraisers operating under AMCs and being completely unfamiliar with both local conditions and their inconsistent use of foreclosures is worse than maddening -- they are doing harm to their clients, the lenders.

By killing deals that would PRESERVE VALUE in neighborhoods these scared and clueless appraisers are putting the LENDERS at greater risk of having FURTHER DECLINES in otherwise SOLID neighborhoods.

Real estate agents generally at least are LOCAL to an area, and OFTEN know exactly what sorts of properties are in what condition so they have a much broader sense of what areas are hit with wide spread conditions of properties in poor condition vs good properties with borrowers in distressed financial condition. The two do not always go together!
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Old 05-27-2009, 10:22 AM
 
982 posts, read 882,245 times
Reputation: 249
I didn't say they did. Not sure what you're ranting about here, but my post was meant to say that appraisals, like realtors' CMAs, are somewhat subjective. You get 10 people in the house, you're going to get 10 different values b/c they're done by a human and there is room for personal feelings to come into it.

Moderator cut: off topic

Last edited by Marka; 06-02-2009 at 02:06 PM..
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