Cash purchase & appraisal

[Fernando]

I see it all the time. Buyer buys property with cash to get the deal (Cash is King). Afterwards, refinance to get a mortgage.

 

[Charles West]

It does not matter if the borrower paid cash or not, once they close on the house they own it, and after they own it, if they take out a loan it would be a refinance or home equity loan

It would be a loan if free and clear, not a refinance.

 

[Elliott]

So, the appraisal assignment is to report the prior purchase, and then to estimate the market value of the subject property, as of the effective date. Your assignment is not to assume the prior purchase price is somehow correct. Your assignment is to estimate the market value of the subject property based on comparable sales.

 

[Fernando]

With a rising trend, the prior purchase price usually is near market and appraised value is about the same.
I had one after several months from purchase, owner thought his house value had increased significantly more.
Seemed like he did get a "good price" in increasing market but I couldn't appraise higher than he thought.

 

[sputnam]

The Lender can call it whatever they want to. The Borrower is seeking a loan on a property that they own. It's a Refinance. I suppose they could have you do a retrospective appraisal with an effective date that was prior to the transfer... but, it sounds to me like they are trying to play games. Tell them that you can't call it a purchase.

 

[J Grant]

It would be a loan if free and clear, not a refinance.

A house that is owned free and clear can still be refinanced. Doing so is called a cash-out refinance. In a traditional cash-out refinance, an existing mortgage is paid off with a larger mortgage, resulting in a lump sum of cash to the owner.

Found this online - lenders still call it a refinance, but no matter what they call it, it is not a purchase loan , wrt the OP said the AMC was calling it a late purchase loan which far as I can tell is bogus - have the OP ask client for a sale contract - I'd love to see the sales contract where an owner purchases his own house from himself!

 

[alebrewer]

I think Charles' point is that it can only be a 're' finance if it has already been financed... IOW, they're RE-financing what has already been financed. Granted, in lay terms, any finance is typically called a refinance. As evidenced by even the F/F promulgated forms - loan purpose: Purchase / Refinance / Other.

 

[alebrewer]

Either the AMC is an idiot, or they are sleazy, ditto for the lender, and owner - and the OP perhaps inexperienced?-

You really should probably stop calling the RW's conspiracy theorists, J. That is, unless you're ok with decrying others for what you, yourself, do as well...

 

[J Grant]

You really should probably stop calling the RW's conspiracy theorists, J. That is, unless you're ok with decrying others for what you, yourself, do as well...

I removed that part from my post because it is conjecture - this is your second dig at me on appraisal topic section about posts from the WD section -lol - conspiracy theories are conspiracy theories ( look up what it means, ) it just happens with current events most of them come from the R side -

But back to appraisals, some clients or orders are questionable, -an odd thread though, OP says from appraisal related IT side is it from an appraiser? .

 

[alebrewer]

Conspiracy Theory: an explanation for an event or situation that invokes a conspiracy by sinister and sometimes powerful groups, when other explanations are more probable. Doesn't have to be political in nature. It's looking for a boogeyman behind every door - specifically the AMC/Lender door in your case.