[BBMW]

As sale prices in metro Vegas have been rising, has there been any problem getting properties to appraise for mortgage purposes? Given how badly the banks were burned in the last bubble, I think there would be pressure on the appraisers to not let values go up too quickly.

[OmegaSupreme]

Originally Posted by BBMW

As sale prices in metro Vegas have been rising, has there been any problem getting properties to appraise for mortgage purposes? Given how badly the banks were burned in the last bubble, I think there would be pressure on the appraisers to not let values go up too quickly.

From my experience, appraisals come pretty close to real estate comps which come pretty close to sales prices

I don't think appraisers have any pressure whatsoever, they do their job and move on. It's the market that determines price, so if comps are on the up, then the same will go for a new appraisal. (Almost) Every house in Las Vegas is different, be it condition, landscaping, improvements, etc, etc. Appraisers make adjustments for these.

Obviously, there will be a little lag in comp prices if the market has gone up a lot in the past couple of months.

[AmericaWestCMH]

Just sold my home in Vegas. Appraisal came in exactly at offer price, surprise surprise. It's all a racket.

[Packrat1]

A few years back my wife and I bought a bank foreclosure. We were financing the home as an investment rental. We offered $250k for the home. The Bank selling the house came back with a price of $275k. Our Bank's appraisal came in at $250k, the bank then agreed to the $250k price due to appraisal coming in lower. We felt pretty lucky as we would have still bought the house at $275k.

[Charlotteborn]

Originally Posted by AmericaWestCMH

Just sold my home in Vegas. Appraisal came in exactly at offer price, surprise surprise. It's all a racket.

Many people don't understand what an appraisal is. If a typical buyer and seller have agreed on a price and that price is within the appraisers adjusted range in value then it is likely that the property will appraise for the contract price.

Not a scam, just a fact.

[JustMike77]

Originally Posted by Charlotteborn

Many people don't understand what an appraisal is. If a typical buyer and seller have agreed on a price and that price is within the appraisers adjusted range in value then it is likely that the property will appraise for the contract price.

Not a scam, just a fact.

Well put. And when the purchase price is outside the range of the comps, it won't come in. I had a condo just last week that was listed for $ 675,000, bid up to $ 710,000 which was completely unsupportable. I appraised it at $ 650,000 which is what the comps supported.

[BBMW]

But in a rising market, don't the comps become something of a chicken and egg situation. Prices are rising, so new deals are priced above existing comps. But since prices are rising, the previous comps may no longer be valid. How far above existing comps is acceptable?

[OmegaSupreme]

Originally Posted by BBMW

But in a rising market, don't the comps become something of a chicken and egg situation. Prices are rising, so new deals are priced above existing comps. But since prices are rising, the previous comps may no longer be valid. How far above existing comps is acceptable?

All I know is that when I was making offers on houses late 2015, I was getting outbid by higher offers, mostly in the realm of 4-5% above comps.

I don't know what is acceptable, but if the appraisal comes in under the accepted offer, then either the seller has to reduce their price, the buyer ups their offer, they meet in the middle (or somewhere), or the offer falls through.

One house I missed out to a higher offer, fast forward a month or two later, it's back on the market. A few days after that, the house sells for a much lower price than what I originally offered.

In a hot market, a buyer can waive the appraisal contingency to make their offer much stronger (assuming they have the cash reserves) but I'm not sure listing agents even notice if that's done