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It's just damned unfortunate on all sides ... we went in full price thinking that another couple that spent 45 minutes looking at the same property as us and looking VERY happy walking out so we assumed we had to make an aggressive bid to get it ... then the bank hires an assessor that thinks otherwise ... and the seller obviously being just as frustrated as we are.
So, you bought a property at full price in a declining market and admitted that you had what we call unusual motivation. Your motivation for paying full price had nothing to do with what similar properties were selling for, but rather, your concern that someone else might outbid you.
You also said
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So logically we agree that just by the numbers all things being equal it is probably pretty close to the appraised price, but emotionally it's worth more.
Your above statement is an admission that the appraised value is probably pretty close to the contract price.
After admitting all of this, you then blame the appraiser because the appraiser's opinion comes in less that your contract price which was motivated by your feelings rather than market data.
Thank goodness that this 'cottage industry' exists to protect the lender's interests or else they'd lose even more money by trying to satisfy fools like you. And as far as it being a cottage industry, you might be suprised at how many of us appraisers most likely make way more money than you do.
And you might want to get some education on the difference between an appraiser and and assessor. It might help you the next time you buy a house.
The appraisal company refused to budge on the appraisal.
The seller relented and we met in the middle. 7500 above appraisal.
Normally, if this were an average home on an average neighborhood and average schools, etc., we would walk away. But we'll be moving into one of the best school districts in the area, the neighborhood is super walkable and the immediate neighborhood is quiet, and it's about a 10 minute commute from work for me.
Personally, my big lesson learned is to always always always negotiate on price just to give insurance about appraisals. I understand the bank hires appraisers to figure out risk and stuff, but it's simply ridiculous that I have to spend $500 for a report that basically says we're (in their OPINION) paying too much and support their little cottage industry. Baloney. Especially when awesome schools, awesome grounds, awesome neighborhoods, awesome views not 3 miles away, and convenient to a lot of areas. I fail to see how the appraiser helps me at all. Nothing but headaches and money down the toilet. If the banks were so risk adverse, why not refer to the county tax records and have a window around that? The county we're buying in already has an assessor!
Whatever. I just find it ridiculous some cottage industry has a say in what otherwise would be a totally rational business transaction.
Just pay with cash. Then you can avoid appraisals all together.
Just pay with cash. Then you can avoid appraisals all together.
This.
Or just do your own appraisal then try to get the lender to accept it. Esker 0 if you know what the value is, just tell them and ask them to trust you. "Cottage industry"? You just revealed your total lack of knowledge of real estate, the mortgage industry, and appraisers and their function. No wonder you are paying too much.
Good grief. Most people would be glad that the appraiser maybe just saved them from buying something for more than the market would typically pay. But if you know more than the appraiser.....go for it.
I don't know why I bother. Obviously charlatans that work in the appraisal industry will be offended, ... if you're that good at maths, why not do the world good and become economists or something else?
My point here is that in every other free market industry where a consumer is buying something - be it a boat, or a car, or even a vacation, the consumer sets the price by shopping and not having middlemen dictate what THEY think the price should be. Even when middlemen are involved, say distribution of liquor, they have to compete with price of other distributors lest they go out of business. I mean if I was to go on a trip to China, a guided tour, over a 10 day period and would get to see a lot, all for $3000. I call up the travel agent and say let's do it, maybe a little haggling if I found a better deal. Now say just days before I go on the trip some guy steps in and says "AH HA but you silly people! I think this is only worth $1000 and I'm telling the world about it and there's nothing you can do about it, and you can't go until the price comes down!" I'd punch him in the face and tell him to get lost!
Why is housing different? To protect lenders? Hogwash. Appraisers have no obligation whatsoever to the free markets and have more power over them than the consumer. They have no competition, no justification for their existence beyond giving a "warm fuzzy" to the banks. Technically they could if they wanted destroy the real estate economy by all lowballing estimates. That to me is interference with the markets. That to me is a cottage industry with zero accountability and all the power.
Now am I happy that I saved $7500? yes of course. I admit that, thank you. But was it worth the stress? NO! I wish they'd bugger off and figure out how to get into someone else's hair.
Last edited by eskercurve; 05-05-2012 at 01:21 PM..
Your information is not correct. You are borrowing money and that's why a third party gets involved- because your chose to have that third party involved. Go ahead and spend your own cash on things and no one will be in the middle.
Banks make sure that you aren't overpaying for cars too. It's just that cars have a tighter pricing scheme and you'r not aware of the bank actually doing this background work. Buy a custom car for a high price and there's likely to be value issues.
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Appraisers have no obligation whatsoever to the free markets and have more power over them than the consumer.
That's hilarious. Couldn't be farther from the truth. Where do you think that appraisers get their data from? It's from sales in the free market! Appraisers actually don't have any power. If you knew anything about mortgage underwriting you'd realize that the lender has a lot of 'power'. It's the lender's decision on what to do with the appraisal findings. They could lend you as much money as they'd like. It that they've made THEIR choice on what loan programs they want to offer and those programs have underwriting guidelines. Many lenders also have in house programs where they make their own rules. But the bottom line is that it's the lender who makes all of the decisions.
It's not beneficial for any appraiser to intentionally be biased in an appraisal. There are too many competing interests involved that put the appraiser at liability. If it goes into foreclosure in the future then the lender is going to review the intial appraisal and the appraiser could be sued. On the other hand, if an appraiser wanted to low-ball properties to reduce that liability then that appraiser would likely not get any business from those clients to begin with. Competency and honestly is the best way to go.
Are you really that ignorant when you say that appraisers have no accountability? I don't have the time to list all of the regulations that we operate under. Just for one- try Googling Dodd-Frank and tell me how long it took you to read through that.
My point here is that in every other free market industry where a consumer is buying something - be it a boat, or a car, or even a vacation, the consumer sets the price by shopping and not having middlemen dictate what THEY think the price should be. Even when middlemen are involved, say distribution of liquor, they have to compete with price of other distributors lest they go out of business..
Seriously, YOU didn't buy anything. You put a deposit down and borrowed money from the bank. The bank owns the property - NOT YOU - until you pay them back. I know nobody likes to hear that, and emotionally it feels different, but that is the reality.
As always, them who has the gold makes the rules. You don't like those rules, pay cash.
Seriously, YOU didn't buy anything. You put a deposit down and borrowed money from the bank. The bank owns the property - NOT YOU - until you pay them back. I know nobody likes to hear that, and emotionally it feels different, but that is the reality.
As always, them who has the gold makes the rules. You don't like those rules, pay cash.
The bank doesn't own the property the homeowner does.
If the property appreciates in value 20% over the next few years,the homeowner reaps the equity gain if they sell the property not the bank.
It's almost like saying I am not a free man,because if I go out and commit 5 felonies and get caught I will go to jail.
The bank doesn't own the property the homeowner does.
If the property appreciates in value 20% over the next few years,the homeowner reaps the equity gain if they sell the property not the bank.
It's almost like saying I am not a free man,because if I go out and commit 5 felonies and get caught I will go to jail.
I have no idea what your second sentence means, so I'm ignoring it.
But the truth is this: the homeowner is not the owner until the mortgage holder is gone. Notice the lien that is filed on your house deed? There's no gain unless it exceeds the amount you owe on the house.
You do not OWN anything unless the loan is paid off. Not your car, your furniture, your home, etc. You may feel like you own it - and you should. But in the end, until you have no lien against the asset, you do not own it.
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