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That's a good one. Compare a house to a car? Maybe we should all go and drive our houses around for 100,000 miles or so and then see what they are worth.
He is not comparing houses to cars. He is giving an example that houses, compared to similar houses that are newly constructed, are usually worth less. Because why would somebody pay the same, or more, for a "used" house if they can get a brand new one for the same or less money. In addition, if the new construction is being discounted, this effects similar houses in the immediate area.Andtniam
Last edited by Annemieke Roell; 10-17-2009 at 09:25 AM..
Laws about appraisals have changed in most all states. The bogus market before was being driven by speculative investment flippers, cash and dashers. Highly driven by all involved, including agents. For this reason, apprasiers are including short sales, REO sales, and acting entirely independant. Banks are also using outside sources to double confirm appraisals. This go around, an inflated appraisal can result in civil suits, as all have been warned. With this in mind, appraisers are fearful and will not overvalue anything. Conservative valuations rule the day for the long term furture.
That's a good one. Compare a house to a car? Maybe we should all go and drive our houses around for 100,000 miles or so and then see what they are worth.
I really think you should spend a lot of money and time in challenging the appraisal...........you might be able to learn something in the process.
Do you really think your year old carpet is worth the same as new carpeting? Do you think last years windows are the equal of todays energy star windows? Your garage door has operated close to a thousand times since it was installed, do you think it is worth the same as a new one? No hands have touched or smudged a wall or door? Give it 5 or 6 years and see what kind of depreciation has taken place.....give it 15 years with no upgrades and improvements (the equivalent of your 100,000 miles) and see if it is worth much.
Thanks everyone for their comments! The question here is that, if I have to challenge the appraisal, what are the factors which would make a strong case to show that our house is valued more. For example, if our house is on a cul-de-sac and one of the comps is backed to a busy street, then there should be some adjustment made to the comp to reflect this and the appraiser entirely missed this point. Also, upgrades made to our house in terms of glass cabinets, etc. have not been thoroughly accounted for when comparing to comps which do not have those upgrades. I believe I have compiled a list which should bring up the value about 1.5-2% more which might save us about $5K.
Laws about appraisals have changed in most all states. The bogus market before was being driven by speculative investment flippers, cash and dashers. Highly driven by all involved, including agents. For this reason, apprasiers are including short sales, REO sales, and acting entirely independant. Banks are also using outside sources to double confirm appraisals. This go around, an inflated appraisal can result in civil suits, as all have been warned. With this in mind, appraisers are fearful and will not overvalue anything. Conservative valuations rule the day for the long term furture.
What appraisal laws have changed?
Just FYI ...... under valuing is just as bad (and illegal) as over valuing.
Thanks everyone for their comments! The question here is that, if I have to challenge the appraisal, what are the factors which would make a strong case to show that our house is valued more. For example, if our house is on a cul-de-sac and one of the comps is backed to a busy street, then there should be some adjustment made to the comp to reflect this and the appraiser entirely missed this point. Also, upgrades made to our house in terms of glass cabinets, etc. have not been thoroughly accounted for when comparing to comps which do not have those upgrades. I believe I have compiled a list which should bring up the value about 1.5-2% more which might save us about $5K.
Your best bet is to have a competent appraiser review the appraisal.
The old rule of thumb in appraising is: land values appreciate and improvements depreciate. In soft markets where land values (or residential lots) are not in demand, then their values either stay the same or they also go down in value. That is essentially what we are seeing; most of it brought on by the mortgage crisis. What slows depreciation down is the cost of new construction which keeps going up.
So yes, sometimes property does go DOWN in value. Bottom line - supply and demand.
Average 30 year rate Oct 17, 2008 : 6:5%
Rates today : 4.9%
That's $100 a difference in payments a month per $100K borrowed, which adds up pretty quickly.
The motivation to refi is obvious. I think crazyma's point might have been is that it's likely a property might not appraise sufficiently for a refi, within a year, in a so-called normal, pre-bubble market. Closing costs alone, would have likely wiped out any appreciation.
At the financial institution I work for, we do allow appraisal appeals. Our requirements are a letter of appeal, as well as at least 3 comps supporting the letter/value. Granted, I don't think I've ever seen an appraisal value changed due to the appeal, seeing as most of those homeowner's wanted to supply 1+ year old comps and not realize that the market has actually changed in the past couple years. . .
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