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I was interested in this segment because we were just talking on another thread about whether updates and renovations can increase appraisal value. I took some notes and will post them as soon as I can get them typed up....
Couple paid $325K 6 years ago; now asking $225; 6 mos. on market; no offers
Appraisal came in at $190K -- $35K less than their asking price!
They said "under-appraisals" are one of biggest problems in market today; even if buyer and seller agree on price, many sales fall through because the bank won't approve the mortgage at that amount.
So the sellers got advice from a professional appraiser on how to get a higher appraised value.
#1 - Overgrown yard indicated deferred maintenance; landscaping was cut back
#2 - "First sight" is critical -- you want a clean, uncluttered house; pack away personal touches
#3 - Update "small subliminals" such as an old style of faucet, a big outdated TV, a rug on top of a carpet (could be hiding something); move out oversized furniture
The couple spent $1600 on updates. They then had a new appraisal -- guy with 26 years' experience.
He said appraising is "part art, part science". He did ask the Seller to list the improvements they had made, but he said "cost does not equal value", so the Seller cannot expect to be reimbursed for the entire amount of their upgrades.
The new appraisal came in at $214K.
They did not say whether the house has sold yet.
All in all, it really wasn't anything that we didn't already know in terms of staging your house for sale....
I agree.
While appraisers have protocols and procedures, there is ALWAYS some level of subjective involvement, and neither Buyer nor Seller get to choose the appraiser.
I tell my Sellers that they have to sell the home multiple times.
To the Buyer
To the Home Inspector
To the Appraiser
And probably to the Buyer again, after the other two are done
So, they always need to present the home in the best possible condition to all of those parties.
They care about the nuts and bolts and the useful life of said nuts and bolts and whether mechanicals are working or not.
They also care about sold comps.
They also care about REO's, in foreclosure status and short sales in your neighborhood.
It should have been a show about readying your house for sale.
I saw a house recently, built 1976 - immaculate, truly updated and ready to sell. Looked like a 2012 model home. Priced at market, sold in 5 days of listing at listed price. This particular county where the home is located is a little slower to sell than surrounding counties where average DOM is 77.
If there is one thing that is down right despicable is the tendancy of these TV show producers to s-t-r-e-t-c-h FACTS to the point where they'd be charged with malpractice in any sort of professional capacity.
No sane lender would accept a second appraisal that is 12.6% higher than the first appraisal unless there was a change in the comps. The sad fact is that second appraisal is STILL a pretty hefty $11,000 LESS than asking price. Depending on local market conditions that means offers that might come from potential buyers that are not discounting close to 5% from asking price are likely to STILL get slammed by the lender. So the hapless seller has spent $1600 out of pocket on "improvements" that are nowhere close to getting them out from under their HUGE $100,000 (give or take , no mention of downpayment...) upside downness!!!
If I were a listing agent and told an underwater borrower to sink more money into their property I might have to defend my self against a lawsuit.
Seriously.
Now you'd need to have a screw or two not just loose but absolutley MISSING from ol' melon to let your landscaping go all over grown / weedy and have loads of crappy old furniture / TV from the "time before plasma" unless you really want lowballin' bottom feeders to submit ridiculous offers ... Cleaning is FREE people. Do it. End of story.
Quote:
Originally Posted by ocngypz
I'd say it was mostly a BS show.
Bank appraisers don't care about staging.
They care about the nuts and bolts and the useful life of said nuts and bolts and whether mechanicals are working or not.
They also care about sold comps.
They also care about REO's, in foreclosure status and short sales in your neighborhood.
It should have been a show about readying your house for sale.
I saw a house recently, built 1976 - immaculate, truly updated and ready to sell. Looked like a 2012 model home. Priced at market, sold in 5 days of listing at listed price. This particular county where the home is located is a little slower to sell than surrounding counties where average DOM is 77.
I'm not an appraiser, nor have a huge detailed knowledge of appraisal theory.
here is what I see happening
same comps, but differnt condition adjustment.
or different comps.
saying that appraisals don't look at staging etc, is all well and good, however, they adjust for condition. condition and condition is subjective, and anything that is subjective can be influinced in changing how a home appears, by taking overgrown landscaping and making it neat as a pin, by cleaning out the house to make it feel "better" granted some of this is in extreme cases, but I can see increasing a step or two in the right directing due to making things feel nicer rather than dated, dingy and not well taken care of.
Reality TV shows are not reality and all part of the grand illusion, just keep that in mind. Top of the line upgrades do not increase the value up to the dollar amount you pay for them. Most of the time you are better off just cleaning it up and repairing what you need to and pricing it accordingly.
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Totally true!
