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Old 12-05-2009, 12:39 PM
 
Location: North Carolina
756 posts, read 1,531,182 times
Reputation: 283

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Are any of you - especially NC where we want to buy - seeing large disparities between list, offer, and appraisal prices on homes?

Here in AZ, the man who bid on our home lost one a couple weeks ago. It was listed at $325K. He bid $320K. The appraisal came in at $285K!

If that kind of disparity is everywhere, then there are a couple of issues: do sellers give up? hold out? give in to the appraisal?

If we gave in to the appraisal here (assuming is it that big a difference), would we "gain" it back in NC or would it just create a bigger gap between what we have and what we need there?

I am curious as to how this is playing out across America right now.
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Old 12-05-2009, 02:24 PM
 
Location: Barrington
57,260 posts, read 39,366,530 times
Reputation: 18604
I have yet to personally encounter a transaction that did not appraise. I do my homework and know my local market, well.

While most of the inventory in my area is custom, my 400+ home sub division is 40 years old with dozens of models. The price spread on the same model can vary by as much as 100%, dependent upon location and updating.
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Old 12-05-2009, 02:59 PM
 
28,461 posts, read 76,667,794 times
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The more foreclosures that have changed hands or the more short sales that have closed the WORSE the appraisals have come back -- it is VERY WISE to ask your real estate BLUNTLY to run a report that details ALL the gory details of just how many places have changed hands in these sorts of transactions. If the MLS data or court records or what ever have a break out of what has changed hands in 'regular' transactions that too should be reported. Appraisers can only use the data that is out there and if it is all the distressed stuff...

My gut tells me that in MANY places there are lots and lots of people that are smart enough to sit tight until the down drafts subside and in those cases prices may rebound sharply, but in other places the shear desperation is going to keep prices depressed for an extended period. Talk to your neighbors! If they are willing to 'ride things out' (and they have income sufficient to cover their mortgages ...) that would be the kind of place that prices will come back faster.

The history of houses appreciating on average 3% or so is mostly true, but the fact is when houses on average change hand about every 7 years or so that can mean that the price steps up jumps of 20+% on a transaction-by-transaction basis. That pattern can still hold for folks that were move infrequently, its just that the period from maybe late 2007 to 2010/11 is going to have to be "compressed" to one 'mental calendar year'...

I doubt that prices in North Carolina are going to magically levitate. You might get a bit of a bargain, as AIG and some of the other big sick financial firms lick Wachovia & BofA flushed out a lot staff, but the long term trend of retirees and vacationers scoop up lots of the most desirable stuff -- though who knows how long that will work with uncertainty in Washington regarding taxes...
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Old 12-05-2009, 03:14 PM
 
Location: Salem, OR
14,783 posts, read 35,825,961 times
Reputation: 14795
I think how the appraisals come out depends on what percentage are short sale and foreclosure homes. We don't have a lot out in my area. All of my sold listings have appraised as have my offers for buyers.


Whether or not you can make up a hit on the other end...not sure. I am sure I am going to lose a listing I just did a CMA for because they already wrote up an offer for a house in another city without selling theirs first. My CMA is not pretty because it's not pretty. Unfortunately that have an accepted offer on a house in another city with the expectation they get a certain number here that I know they can't get. I feel bad for people in that situation, but you can't force the market to do what it won't do.
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Old 12-05-2009, 03:18 PM
 
8,449 posts, read 9,689,480 times
Reputation: 5694
In my own neighborhood, a home that should've appraised at $350K recently came in at $270K.

It was an out of area appraiser who pulled comps that she shouldn't have - neighborhoods in NOT similar areas, several miles away - and ignored recent solds (within last 6-9 months) within the same subdivision.

She was a wack job.

Everything turned out okay in the end - thankfully due to a seasoned agent being able to prove that the appraiser didn't know her buttocks from a hole in the ground.
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Old 12-05-2009, 05:00 PM
 
Location: Lowcountry
764 posts, read 1,493,614 times
Reputation: 416
I don't think you'll 'gain it back' in WNC - maybe 10 years ago you could have stretched your buying power but that's long gone. Prices were bid up unrealistically during the bubble and now are slowly adjusting to market reality.

Taxes are increasing because many local governments based their budgets on top of the market valuations but the revenue stream never materialized; the bills to improve the infrastructure now need to be paid.

People who bought just a year ago in WNC now realize they may have pulled the trigger too soon...
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Old 12-05-2009, 05:10 PM
 
Location: Just south of Denver since 1989
11,496 posts, read 31,195,611 times
Reputation: 8128
How do you know what the property offer price was, and what the appraisal was?

Not here around Denver, in the under $400,000 market.
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Old 12-06-2009, 08:26 AM
 
3,029 posts, read 7,740,684 times
Reputation: 3233
Quote:
Originally Posted by GuyFriendly View Post
Are any of you - especially NC where we want to buy - seeing large disparities between list, offer, and appraisal prices on homes?

Here in AZ, the man who bid on our home lost one a couple weeks ago. It was listed at $325K. He bid $320K. The appraisal came in at $285K!

If that kind of disparity is everywhere, then there are a couple of issues: do sellers give up? hold out? give in to the appraisal?

If we gave in to the appraisal here (assuming is it that big a difference), would we "gain" it back in NC or would it just create a bigger gap between what we have and what we need there?

I am curious as to how this is playing out across America right now.
Are you suggesting that this buyer is way more knowledgeable of the local market and true market value than the appraiser?

Sounds like you have a buyer who is paying way over true "market value". That happens a LOT more often than appraisers being off by that much. The situation that you posed is not uncommon at all. Buying a home is often more of an emotional decision, rather than logical and practical based upon market evidence.
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