Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > General Appraisal Discussion
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 11-07-2009, 11:24 AM
Duckey's Avatar
Duckey Duckey is offline
 
Join Date: Aug 2006
Location: Willamette Valley, Oregon
State: Oregon
Professional Status: Certified Residential Appraiser
Posts: 254
Default Agent raising sales prices to cover CC again

Is anyone else seeing the agents starting to raise the sales prices to cover closing costs again?

We are not talking 1 or 2 thousand-we are talking $20K. We have had to come in under sales price on two as the comps just could not support the increase in price to cover closing costs, and what looks like the $8K home buyers credit.

The properties were also exposed to the market at the agreed upon sales price for up to 4 months and did not sell at that price so we could not find any way to justify the higher prices. One was listed for 239 days and did not sell. Price reductions all thru the listing time. It was on the market for $274,900 for 4 months and did not sell. When it was reduced to $260k it sold. The contract was written for $280k with $8K in seller paid closing costs. There were nearby sales for as low as $229K. The higher sales were over a mile away.

Is this what realtors are talking about when they say appraisers are killing deals. Perhaps it is agents trying to return to their old ways. Do they never learn?

We have no issue with sellers paying closing costs, but not when the price is raised to cover them, unless it is obvious that the property was listed too low.

If it was worth that, why didn't they list it higher?
Sponsored Links

  #2  
Old 11-07-2009, 11:52 AM
DonRico DonRico is offline
 
Join Date: Nov 2002
Location: Monmouth County, New Jersey
State: New Jersey
Professional Status: Certified General Appraiser
Posts: 786
Default

I think you already know the answer to this one, Duckey.

Just report your findings, make sure they are clearly documented and well-supported. Spell out the price changes and days on market in the report.

Any deal that was dependent upon $20K worth of seller's concessions....was not much of a deal to begin with. You didn't "kill the deal" you merely reported it's Critical Condition to the Triage Station.


I love the realtors who fall back on the old canard "The value is what a buyer is willing to pay for it."
The important fact they're overlooking is THE SELLER ISN'T PUTTING THEIR OWN MONEY AT RISK HERE !!
  #3  
Old 11-07-2009, 12:23 PM
dspur59 dspur59 is offline
 
Join Date: Apr 2009
State: California
Professional Status: Certified Residential Appraiser
Posts: 106
Default because

Quote:
Originally Posted by Duckey View Post
Is anyone else seeing the agents starting to raise the sales prices to cover closing costs again?

We are not talking 1 or 2 thousand-we are talking $20K. We have had to come in under sales price on two as the comps just could not support the increase in price to cover closing costs, and what looks like the $8K home buyers credit.

The properties were also exposed to the market at the agreed upon sales price for up to 4 months and did not sell at that price so we could not find any way to justify the higher prices. One was listed for 239 days and did not sell. Price reductions all thru the listing time. It was on the market for $274,900 for 4 months and did not sell. When it was reduced to $260k it sold. The contract was written for $280k with $8K in seller paid closing costs. There were nearby sales for as low as $229K. The higher sales were over a mile away.

Is this what realtors are talking about when they say appraisers are killing deals. Perhaps it is agents trying to return to their old ways. Do they never learn?

We have no issue with sellers paying closing costs, but not when the price is raised to cover them, unless it is obvious that the property was listed too low.

If it was worth that, why didn't they list it higher?
Because they are real estate agents, looking for any way possible to hook a buyer into a deal.
  #4  
Old 11-07-2009, 01:15 PM
VolcanoLvr's Avatar
VolcanoLvr VolcanoLvr is offline
 
Join Date: Oct 2003
Location: Inside the ring of fire
State: Washington
Professional Status: Certified Residential Appraiser
Posts: 2,707
Default

As a refresher, let's all re-read the Definition of Market value printed on every Fannie form......especially sentence (5) and the following (*) sentence.

That's our 'bible' in this situation....and Ducky has it right.
  #5  
Old 11-07-2009, 01:32 PM
Duckey's Avatar
Duckey Duckey is offline
 
Join Date: Aug 2006
Location: Willamette Valley, Oregon
State: Oregon
Professional Status: Certified Residential Appraiser
Posts: 254
Default

I was wondering if anyone else is seeing this trend again or if it is just this area. We might need to suggest a class to the local boards trying to explain the folly of this issue.

We did come in at what the comps showed as value, well supported and with the entire listing history included in the report, which was much lower than the contract price.

The agent offered to help us find "better comps"-thru the lender, but we have not seen any yet. This was FHA so there is a little more communication allowed right now.
  #6  
Old 11-07-2009, 01:58 PM
nstanbru nstanbru is offline
 
Join Date: Feb 2009
Location: Buena Park CA
State: California
Professional Status: Certified General Appraiser
Posts: 744
Default

I haven't seen as much of this now as before, especially in the under $400,000 range.
Maybe this is another topic, but I'm just curious. Why would the $8,000 tax credit, which is only granted to the buyer, cost the seller anything that would cause them to raise their price?
  #7  
Old 11-07-2009, 05:34 PM
Duckey's Avatar
Duckey Duckey is offline
 
Join Date: Aug 2006
Location: Willamette Valley, Oregon
State: Oregon
Professional Status: Certified Residential Appraiser
Posts: 254
Default

The agents are getting the buyers all excited about getting the $8K and convincing them to pay extra to get the house "before someone else makes an offer". It is agents and builders pushing the sales prices up due to the $8K. We are seeing tons of this with builders. I am not saying that this is logical behavior, just that we are seeing it so it is logical that someone has taught them this new trick.

If buyers are that stupid how are they earning the money to qualify?

This is one reason to have the agents get flat fees and have true buyers representation. There is one buyers agent here who teaches classes at the community college about what to look for and how to negotiate. He is also a great agent to work with and does not write concessions into his contracts.
  #8  
Old 11-07-2009, 06:39 PM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 39,196
Default

Quote:
Is anyone else seeing the agents starting to raise the sales prices to cover closing costs again?
What would you expect once the Realtors are shielded by the MLS hiding behind Gramm-Leach-Bliley Act as a reason to not put "concessions" or "Financing" on the MLS. Why do you think they are hiding this?
__________________
"I've seen a great many troubles, most of which never happened.-Twain"
  #9  
Old 11-08-2009, 07:17 AM
Brockway Brockway is offline
 
Join Date: Mar 2004
Location: Rochester, NY
State: New York
Professional Status: Certified Residential Appraiser
Posts: 391
Default

I see it all the time. I recently wrote the local mls and advised them that they need to educate their agents on this issue.

Just last week an agent asked me if she should raise the asking price on her listing because the property sold higher than the list price (with 6% seller's concessions, of course). I advised her that I report all listings within the past 12 months so her change would show up in my report. The agent said she only asked me because another appraiser told her to change her list price on another property because she cannot appraise the home higher than the asking price. Amazing. I asked for the appraiser's name but she could not remember it.
  #10  
Old 11-08-2009, 08:50 AM
OminousRun OminousRun is offline
 
Join Date: Oct 2008
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 648
Default

I had two this past week that did not make contract, and the closing costs added into the contract were just about the difference both times.

I really don't know what some agents are doing. Both of the homes were fairly easy to appraise. One of them had 14 sales in the last 90 days, yet the contract was written $8K higher than the highest sale in the area.

The other was listed last week, sold in 2 days, but was listed 15K higher than anything that had sold in the last 90 days.

Not much you can do about it, I'm just waiting for the phone calls on Monday as to why they didn't appraise higher.
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 01:16 AM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93