Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Great post. A question - back in the "day" (boom and even pre-boom) it was a matter of saying to the appraiser "hey, I need the house to come in at $xxx,xxx, make it happen". In pre-boom however, the "needed" price wasn't way out in the strastosphere, but I'm sure during the boom there were some wacky values being given out by appraisers. My question - how are appraisals handled today? Are they looked over by the lender with a fine tooth comb? Have any appraisals been thrown out for unrealistic values? Do appraisers need to be more careful than in years past?
OMG - fine tooth comb? The teeth are fused! Every appraisal I do becomes a debating contest. NONE go through without review, questions, requests for more comparables, requests for comments on the state of declining markets, you name it. While I'm answering this question, I'm looking down at a review of an appraisal I just did. Basically they are just asking me to go ahead and commit suicide before they'll do the loan...
Seriously though, a WAY more conservative environment for appraisers. We are on the defensive.
Since you are a RE agent, I have a question for you, about appaisal. We canceled an offer due to home inspection issues a few weeks ago. The bank appraised the house without knowing that we were going to cancel. The appraiser went on a Wednesday and he said the result should be available on the following Monday. However, when we called the bank on the following Tuesday, they said they were reviewing the appraisal and cannot give info until that was finished. They gave us the info on Thursday. The weired thing is: it was appraised exactly the price that was agreed between us and the seller.
Now we are out of that contract anyways. Everytime I think of that appraisal, I wonder if the appraisal is truly that number. Is it normal for banks to hold and review appraisal before revealing to buyers? Because we put down 20% on that loan application, could it be possible that the appraisal actually is lower than the agreed price but higher than 80% of it so the bank tweaked the appraisal to make it work? I mean, they won't lose money with my 20% down if the appraisal is between 80%-100% of the sales price. Could it be the case or am I just too delusional?
First of all, you have a right to see the appraisal period. They cannot withhold it. As far as the number matching the sale price, this frequently happens. If you pay, for example, $380,000 for a house and the comps indicate a natural value range of $365,000-$395,000, the appraiser usually tends to just reconcile in the middle of range and goes out at the sale price.
I find that buyers and sellers are usually quite accurate once the back and forth is over with. The "meeting of the minds" is usually quite reflective of the current state of the market. Not always of course, but most of the time.
In fact, with the market in free fall, most of my comparables are usually higher than the sale under consideration, and a negative time adjustment is necessary to bring everything into balance.
In the old days, a negative time adjustment would have been considered an unthinkable kiss of death. But today, it's business as usual. Although to be honest, the underwriters still do not like it and it generates a lot of requests for additional comments and market data.
as an aside, Open Houses only result in a sale 5% of the time...
Yeah. I've heard that realtors use them mainly to collect buyers to work with on buying other houses, and rarely think they are helpful to sell the particular house being "opened".
If I were selling my house, I would probably insist on a "no open houses" because I suspect they're just a big waste of time. But if I was going to be out of town for the weekend and trusted my realtor, I guess it couldn't hurt to have one anyway.
Well, unreasonable is a relative term and if I set the price, I obviously dont think it is unreasonable. If I used a realtor, I would certainly be upfront with them. I have no desire to have a realtor who feels they were tricked into something. I have a feeling many would take the listing anyway, and if not, I would list it myself. The point is, just because someone doesn't want to come down in price at the realtors behest does not mean they are in denial, or even unrealistic. It just means they are setting the price that they want for something they own and you can take it or leave it.
yeah, well set the price of your Yahoo stock to 50 bucks a share and see how many buyers you get. The market sets the price, not you. If you want to sell, you need to listen the market.
yeah, well set the price of your Yahoo stock to 50 bucks a share and see how many buyers you get. The market sets the price, not you. If you want to sell, you need to listen the market.
Great analogy!
One potential difference though is that in a very open market (e.g. the stock market), all buyers have access to the current market rate, but in the case of buying a home, the buyers may not have access to all the info (e.g. no idea what the current bidding is on the home, or even how to match the home with comparables in the market since homes are not equivalent enough and cannot really be equated to identical shares in a stock)
nah, I'm not in that boat... I've been a good boy with my finances
Has nothing to do with finances, and everything to do with when you bought your home. People who bought within the last few years, even with ok down payments, are probably underwater, simply because of the bubble at the time. It's not your fault if all the homes for sale are priced "too high" for the market to bear for long.
I bought in 2002, and our neighborhood is ok (plus, we bought way below assessed market value at the time), so I'm still above water for now, but I expect to lose more of our equity in the home going forward. The star ledger had a big DEPRESSION headline today, and if we do slide into a depression, we'll have more to worry about than just the equity in our home.
One potential difference though is that in a very open market (e.g. the stock market), all buyers have access to the current market rate, but in the case of buying a home, the buyers may not have access to all the info (e.g. no idea what the current bidding is on the home, or even how to match the home with comparables in the market since homes are not equivalent enough and cannot really be equated to identical shares in a stock)
I'm confused. First you congratulate the poster on a "great analogy" and then you give the perfect reason why the analogy doesn't work at all. Apples and oranges. Every share of Yahoo is EXACTLY the same while every home is completely different. 2 houses of the same square footage on the same sized lot can have a totally different value, people's tastes are as varied as can be, and some salespeople can sell ice to eskimos while others couldn't sell it on a hot day in hell.
And the poster is wrong when he says I dont set the market. I DO set the market in that I am a part of it. Every person that is selling and buying is a piece of the puzzle that makes up the market. The market is not magically ordained by the heavens. It is a compilation of what price people are willing to pay and accept in a given area. If a person has no urgency to get out quickly (or at all for that matter) and wants to set their price at the higher end, that is their choice. Maybe someone will love the house and make a reasonable counter offer. Maybe not. Maybe the house will stay on the market for a long time, until prices come back up. Either way, it is the seller's house, the seller's circumstances, and the seller's decision, not the realtor's. As I said, if a realtor doesn't like my plan, they dont have to accept the job.
A certain proportion of sellers overlist in the mistaken belief that they might "get lucky" and find a sucker. The problem with that? Suckers don't have money, they apply for mortgages. So even if a sucker comes along and offers to overpay, which probably won't happen, the appraiser will do his job and kill the deal, which definitely will happen.
At this point it could be argued that it is socially irresponsible to list a property for sale at an unreasonably high and unsupported price. It just adds one more home to "inventory", adds one more persistent "for sale" sign to the streets, and fuels the gloom and doom that continues to feed on the economy.
Realtors always get so emotional over this subject. I am hurting the economy by listing my house over market value? LMAO! Even if I were to accept your "doom and gloom" theory, I'm not going to make a decision to of whether or not to list my house based on how it effects the economy! This is insane! I think some people are in serious need of a reality check here!
I am selling something I own.
I am setting the price I want for it.
If nobody wants to buy it for that price, I will not be able to sell it. PERIOD.
I am not forcing any realtor to accept the listing. In fact, I may put it fsbo.
This is just too funny.lol.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
First you congratulate the poster on a "great analogy" and then you give the perfect reason why the analogy doesn't work at all. Apples and oranges. Every share of Yahoo is EXACTLY the same while every home is completely different. 2 houses of the same square footage on the same sized lot can have a totally different value, people's tastes are as varied as can be, and some salespeople can sell ice to eskimos while others couldn't sell it on a hot day in hell.
