Are properties really selling over market value?

[residentialguy]

No, I do not like to do review work.
I don't like to judge my fellow appraisers ... otherwise, I'll rip them apart.

I was just wondering because I clearly stated the opposite of what you accused me of doing. So if that's how you "rip appraisers apart", lol... I wouldn't be the least bit worried.
As I say to these QC monkees... You might want to read the report before you critique it.

 

[Tim Hicks (Texas)]

Appraisers need to consider the fact that some offers are made hoping to get the contract and the appraiser will save them from overpaying for the property. I have heard that from several agents. Offer more than we can support, get the offer accepted and hopefully the appraisal will not be that high. Ha? Silly agents, we have too many number hitting appraisers in our midst. If the appraiser hits the price, then it must be worth that price. But, you can't offer $30,000 more one month, then offer $30,000 more than that sale next month. Or can you? It all depends on what type of appraiser you get and what the most recent market data shows. I am including nothing but sales within the past 30 days unless there are none in most reports. Still doesn't help sometimes.

 

[Fernando]

Prices increasing so fast with general consensus everything is going up reminds me of the buildup before the Great Crash in 2008-2009.
Back then everything was going up. Now not all properties and rents seem to be finally getting back to normal.
There were many appraisers who hit the numbers before and got into trouble.

There was one lady appraiser who lived 3 blocks away from me and she got flagged by the state agency.
She appraised too high in a low income area (those areas rise fast and fall fast).
State put her on probation with the usual penalty of taking more education classes and such.
Eventually she let her license expire. Maybe difficult to get E&O to continue.

 

[Alsie35]

Appraisers need to consider the fact that some offers are made hoping to get the contract and the appraiser will save them from overpaying for the property. I have heard that from several agents. Offer more than we can support, get the offer accepted and hopefully the appraisal will not be that high. Ha? Silly agents, we have too many number hitting appraisers in our midst. If the appraiser hits the price, then it must be worth that price. But, you can't offer $30,000 more one month, then offer $30,000 more than that sale next month. Or can you? It all depends on what type of appraiser you get and what the most recent market data shows. I am including nothing but sales within the past 30 days unless there are none in most reports. Still doesn't help sometimes.

If they are letting their buyers bid way over list without waiving the appraisal contingency and guaranteeing the difference in cash, I would say they are not serving their buyers very well. (But then, technically BOTH realtors are working for the seller).

I thought the appraiser on my home in San Antonio came in a tad higher than I might have, but I'll give him the benefit of the doubt that he knows the market a little better than I do (at this point). It still came in below what we bid (as expected), and in the final analysis the appraisal wouldn't have made any difference one way or another 'cause we were buying it no matter what. (If he had "hit" the contract price, however, my eyebrows would have been raised. I bid over market ON PURPOSE dagnabit! )

 

[Dublin ohio]

The current market is what it is. No so called "undue" stimulus. How could it be undue stimulus when the vast majority of buyers are acting similarly. Inventory has been tight around her for the last 3 years. Supply has been a little lower recently. But I believe it is a result of increasing prices and seller not being able to find replacement home (unless it is new build and those prices are rising also). I have done about 20 purchases in the past 6 weeks. Every contract has been substantially above list with some outrageous gap coverage. But like I said. It is what it is.

 

[Evincere]

The prices that buyers & sellers are agreeing to are in plain sight.

And I suspect that there are more than a few Realtors getting savvy if not downright sneaky. ie. what I am seeing is MLS brochures for subject property - brochured as Turnkey with descriptions of all the expensive beautiful furniture included in the sale.
. For example. List price of $575K - Contract price of $675K - $75-$100 K above List price. No listings, a few pending within $$550 - $600K. Closed sales 550-$600k. No mention of personal property or furnishings in contract. Me thinks there are some side/under the table deals going where furnishings are being financed.

This housing market is starting to look like the Covid run on TP

 

[Evincere]

Good morning jg. I knew I'd flush you out! Good to see you.. Like old times, huh? Deja vu of our 08 conversations.

I see you're still up to your old tricks by putting words in my mouth. I never said or suggested that one sales contract means mv. It was very clear that if everyone was paying the higher prices, that the market is speaking. We analyze it and verify the market sales ... and you know very well that I always have to the nth degree.

Yes, and the market was also speaking in 2005-2008 - What did the market say afterwards? Opps?

 

[Evincere]

By definition, this is the case.

Some people argue that the market is affected by "undue stimulus." However, that's a misapplication of the phrase, and contradictory in and of itself. Undue stimulus is transactional, not market wide. Stimulus can certainly be market wide, but not undue stimulus.

Would you consider these multiple contract bidding wars as undue stimulus?

 

[Evincere]

Appraisers need to consider the fact that some offers are made hoping to get the contract and the appraiser will save them from overpaying for the property. I have heard that from several agents. Offer more than we can support, get the offer accepted and hopefully the appraisal will not be that high. Ha? Silly agents, we have too many number hitting appraisers in our midst. If the appraiser hits the price, then it must be worth that price. But, you can't offer $30,000 more one month, then offer $30,000 more than that sale next month. Or can you? It all depends on what type of appraiser you get and what the most recent market data shows. I am including nothing but sales within the past 30 days unless there are none in most reports. Still doesn't help sometimes.

Yup. They can are are doing just that. Esp if there is no appraisal contingency re a cash differential forked up by the Buyer. I've been doing some tracking and yes, the Appraisals I thought were going to keep on giving endless ROVs have been closing not at contract price but within the adjusted values of the most recent, 30-60 day comparable sales....which was DEFINATELY, NOT and considerably below the contract price. The saving grace has been that properties aren't sitting on the market more than 35 days, so recent sales have been readily available, no time adjustments required, and not a leg for realtors to stand on other than to request I go to another development because although the sales there are only 3 miles away, they are only 1 mile, as the "crow flies" - yes, I have gotten to requests from Realtors for ROV believing Buyers are crows.

 

[Dublin ohio]

although the sales there are only 3 miles away, they are only 1 mile, as the "crow flies" - yes, I have gotten to requests from Realtors for ROV believing Buyers are crows.

Do you apply driving distance to all of you sales?