[Cyborgt800]

How do you distinguish between a "flip" house for sale and "regular" house for sale?

Usually because the house is back on the market in a short time at a higher price...

[observer53]

Originally Posted by Cyborgt800

Usually because the house is back on the market in a short time at a higher price...

And, you can certainly tell which houses are lived in and which are empty or staged for sale, as flippers typically do.

Either can be listed at an irrationally high price.

[cityKing]

Originally Posted by lvoc

Nope. I do not think I have seen a clean appraisal in a couple of years. There are not three close by, the ones close by are not similar or nothing has sold in the last six months. The last one is very common in Las Vegas.

So the question is then what?

The view expressed is pretty naive. The real world does not work like that. And appraiser play to the customer. The value of a property for instance is different to an investor or an owner occupant. So what does the appraisal represent?

Sq mile radius is also a non starter for a number of reasons...

Where do you live? Somewhere rural ? Because in most cases, how I explained actually is how the value of houses are determined ask any realtor, and any appraiser. It would be completely foolish to think the value of your house is going down all because the surrounding houses nearby are fixer uppers, unless your house is in that same exact shape, there is no way your house is worth the same as a fixer upper. It's almost common sense, it sounds to me that you are in some rural isolated location without a ton of similar houses, so typically in that case valuation is a little different but valuation will NOT be based your next door neighbors house being trashed, there is more to it than that.

[airics]

Originally Posted by cityKing

Where do you live? Somewhere rural ? Because in most cases, how I explained actually is how the value of houses are determined ask any realtor, and any appraiser. It would be completely foolish to think the value of your house is going down all because the surrounding houses nearby are fixer uppers, unless your house is in that same exact shape, there is no way your house is worth the same as a fixer upper. It's almost common sense, it sounds to me that you are in some rural isolated location without a ton of similar houses, so typically in that case valuation is a little different but valuation will NOT be based your next door neighbors house being trashed, there is more to it than that.

Yep. ....Las Vegas is rural. . .

[braindead0]

That sounds like lazy appraisers not doing due diligence finding appropriate comps?

[jjameson922]

City King, after stating your theory, you wrote, "ask any realtor or appraiser." I have been both. I answered as it is and you still argue.

[lvoc]

Originally Posted by cityKing

Where do you live? Somewhere rural ? Because in most cases, how I explained actually is how the value of houses are determined ask any realtor, and any appraiser. It would be completely foolish to think the value of your house is going down all because the surrounding houses nearby are fixer uppers, unless your house is in that same exact shape, there is no way your house is worth the same as a fixer upper. It's almost common sense, it sounds to me that you are in some rural isolated location without a ton of similar houses, so typically in that case valuation is a little different but valuation will NOT be based your next door neighbors house being trashed, there is more to it than that.

I sell houses in Las Vegas. In an average square mile there about 15 houses that have sold in the last 90 days. In a mile circle there are about 47 houses. You then divide that down to those that have the same sales conditions (Short, Foreclosure, Classic), The same configuration, approximately the same lot size, similar construction quality and similar condition. When you get done it is rare that you will have 2 anymore three comparables. Then you take the nearest and correct for the difference. I do not believe I have seen an appraisal without a correction in the last 5 years.

Condition is often a big problem. The appraiser often is not aware of the real condition of the comp. He gets to see the target but not the comp. Another is similar homes in communities next to each other built to different standards. Same size and configuration house two blocks apart may differ in value by $10 or $20 per SF. The appraiser may be able to find that out but it can be difficult.


An example. I had a large lot home in Sun City Summerlin. Two appraisals less than 60 days apart differed in the value of a home that sold for 200,000 by almost $40,000. The first and low appraisal could likely have been fought and over ridden but that takes a month or more and it is unlikely that the buyer is going to hold in their for that period.

This is actually pretty tricky art. In Sun City we generally comp off identical models. Generally on a similar lot. We still have a price range at any point in time ranging from -15% to +25%. For some models the plus range will exceed 150%. What you are dealing with is the value of golf course frontage or good strip views. Appraisers are rarely comfortable with these and when listing one it is not uncommon to force a waiver of the appraisal clause in the sales contract before agreeing to sell.

[boboluv]

redfin.com has a "price home" button in the top right corner of most listings. you can use it to pick and choose recent sales to create your own amateur comps. i like to judge the value of my home by picking five houses that have sold recently and nearby that have similar square footage and rooms. we have a pool and hot tub so i make it a point to only pick homes with a pool and hot tub because to me that's up to an additional $30,000 added value that should be considered. the zillow zestimate puts the home around 223k but the redfin comparables with pools and hot tubs puts it closer to 265k.

[007 license to sell]

The thing to remember is that the comps are pulled from what sold in the last 6 months and that can be both short sales, bank owned and flips. Cash sales don''t have an appraisal so that can really mess with what a property is really worth. And as far as listing a home for more than it's worth I see it all the time unfortunately it's not doing the seller any favors or the buyers by listing them for more than the value. The property is worth what a buyer will pay and if they need a loan what the appraisal states it's worth.

Also HAFA doesn't require an appraisal on their loans so the buyer could be paying more than the property is worth as well. What I see happening also to comps is a short sale that closes after a year or so from when it first went into contract those short sales can hurt the comps for current appraisals of homes being sold now.

[lvoc]

Originally Posted by 007 license to sell

The thing to remember is that the comps are pulled from what sold in the last 6 months and that can be both short sales, bank owned and flips. Cash sales don''t have an appraisal so that can really mess with what a property is really worth. And as far as listing a home for more than it's worth I see it all the time unfortunately it's not doing the seller any favors or the buyers by listing them for more than the value. The property is worth what a buyer will pay and if they need a loan what the appraisal states it's worth.

Also HAFA doesn't require an appraisal on their loans so the buyer could be paying more than the property is worth as well. What I see happening also to comps is a short sale that closes after a year or so from when it first went into contract those short sales can hurt the comps for current appraisals of homes being sold now.

You should challenge such appraisals. Shorts and REOs are not appropriate on a classic sale or they need to be suitably corrected. Say $20 per SF for a short and $12 PSF on a REO.