Appraisal Questions Difference Between C4 And C3

[sandpiperapp]

Sounds to me like the appraiser used two model matches and the third comp that was larger and had an extra bath was a different model. If I understand correctly, the original poster wants a more recent closed different model unit to be substituted for an older model match home. Personally, the older model match closed home does not appear be that "old", and I would be hesitant to take out a model match comp to insert an obviously superior comp. I can see where the appraiser put most weight on the model matches. That seems reasonable to me.

 

[Ygb]

Those were young people buying their first houses. It's not one house, now there are two. One sold for $340 in the fall and this one for $350 two weeks ago.
The same house was bought two years ago for $330 and 2 years before that for $300.
I am in Montgomery country Maryland where prices are just crazy. Anyway,
I'll check with the lender to see if letting appraiser know about the latest sale will make a difference and will go through there.
Otherwise I'll try again in a couple of months after I make some improvements.
Thank you everyone for the help.

You may find the Buyer to be the result; were they Local or Out of Town ?

Were they Renting ?
Did they recently Sell a Home ?
Is there something that captured their, emotions about the property ?
Were they Trust Fund Kids ?
Did someone provide some leftover capital ?
We could go on and on, but you get the gist, there are ample reasons for the Buyer to have, what some may consider; Overpay for the property?; that is another thread on another day. You need to gather All the facts; Also, the Closing was 2 weeks prior to your visit, he/she may just have missed it or the local MLS delayed publishing or may have had other figures.
What was the "List Price" of the other House that Sold for $65k above ?

 

[Riick]

Those were young people buying their first houses.

With no experience in negotiation, other than if they go to TruCar they will get the *best* price, since the Realtor
is a Buyer's Broker and acting in the Buyer's best interest, certainly paying full price, plus a $10,000 premium
to be sure they get the hose (errr... House!) because they love love love the (brown/black/pink) granite counter tops.
H@ll, why not, an extra $10,000 only costs them about $48/mo, $1.60 a day, less than a cuppa at the local 7-11.
Cheap interest rates cause price distortions.

 

[Ygb]

Sounds to me like the appraiser used two model matches and the third comp that was larger and had an extra bath was a different model. If I understand correctly, the original poster wants a more recent closed different model unit to be substituted for an older model match home. Personally, the older model match closed home does not appear be that "old", and I would be hesitant to take out a model match comp to insert an obviously superior comp. I can see where the appraiser put most weight on the model matches. That seems reasonable to me.

That's what I was wondering about. You basically explained it well and it does make sense.
On the other hand our house appreciated 30% in 4 years, at that rate 6 months ago is pretty long. No?
I personally expect the market to collapse again, so I just need to refinance before it does or just be ready to walk away from the house.

 

[sandpiperapp]

I am not familiar with your market. In my market, the general real estate market has improved with upward pressure on values in many markets. Having said that, when analyzing specific markets, I find many are not showing signs of increasing, but are more likely to be stable over the past year.
What did the appraiser say in his analysis of your market? We're there any time of sale adjustments next to the date of sale in the sales comparison grid?
I am guessing that the appraiser placed his emphasis on the two model matches. Since the forms we use require a minimum of three closed sales, it doesn't sound like there was a third closed sale that was a model match, so he included a larger model for the third sale and that sale was used as additional support for his final opinion of value. It appears to me based on the sales prices that the third closed sale and the the most recent closed sale were superior homes offering greater buyer appeal. 170 sf difference in homes with similar room and bedroom counts is not a big deal, but if that 170 sf difference added a dining room or an additional bedroom, it can have a much greater effect on value.

 

[Ygb]

Makes sence. The extra 170sq ft added a bathroom. So yeas, bigger appeal. Other than that, they are 3 bedroom homes with the same number of rooms.

I am not familiar with your market. In my market, the general real estate market has improved with upward pressure on values in many markets. Having said that, when analyzing specific markets, I find many are not showing signs of increasing, but are more likely to be stable over the past year.
What did the appraiser say in his analysis of your market? We're there any time of sale adjustments next to the date of sale in the sales comparison grid?
I am guessing that the appraiser placed his emphasis on the two model matches. Since the forms we use require a minimum of three closed sales, it doesn't sound like there was a third closed sale that was a model match, so he included a larger model for the third sale and that sale was used as additional support for his final opinion of value. It appears to me based on the sales prices that the third closed sale and the the most recent closed sale were superior homes offering greater buyer appeal. 170 sf difference in homes with similar room and bedroom counts is not a big deal, but if that 170 sf difference added a dining room or an additional bedroom, it can have a much greater effect on value.

 

[Webbed Feet]

That's what I was wondering about. You basically explained it well and it does make sense.
On the other hand our house appreciated 30% in 4 years, at that rate 6 months ago is pretty long. No?
I personally expect the market to collapse again, so I just need to refinance before it does or just be ready to walk away from the house.

I'll take a stab at a something as a guess and see if I hit. Regardless of the fact your area is booming with appreciation, the appraisal report concluded that the market was either "Increasing" or "Stable" (look on page one of the report for those checkboxes... near the middle right on the upper half of the page. I'd give it an 80% chance it says "Stable") and over on the page with the sales comparison grid (where the adjustments are) on the "Time of Sale" row of the grid (near the top) there are no adjustments for the time of sale of any of the comparable.

How'd I do? Did I hit the nail on the head? If I did, this is a serious problem. I am located in an area of very high appreciation for the last two years. Yet I see, chronically, appraisers stating that the market is "Stable" and failing to make any market change adjustments (referred to erroneously as "time" adjustments). What is going on is pure unadulterated laziness, to the point of fraud as the misleading element is outstanding, and appraisers with exceptionally poor training. Many of the same appraisal reports make all sorts of 4 digit adjustments, for minor crap like fences, while simultaneously ignoring 5 digit market condition adjustments, that should have been made, when market conditions is one of the most important adjustments of the top three of them that should be made.

 

[Riick]

On the other hand our house appreciated 30% in 4 years, at that rate 6 months ago is pretty long. No?

What makes you believe your property gained 30% in value in last 4 years?
The going rate for similar house was $200k in early 2013?

 

[Ygb]

You are correct . Stable and no adjustment for the time of sale. He also said that he relied mostly on the $285k property and $340k property as they were most recent sales.

I'll take a stab at a something as a guess and see if I hit. Regardless of the fact your area is booming with appreciation, the appraisal report concluded that the market was either "Increasing" or "Stable" (look on page one of the report for those checkboxes... near the middle right on the upper half of the page. I'd give it an 80% chance it says "Stable") and over on the page with the sales comparison grid (where the adjustments are) on the "Time of Sale" row of the grid (near the top) there are no adjustments for the time of sale of any of the comparable.

How'd I do? Did I hit the nail on the head? If I did, this is a serious problem. I am located in an area of very high appreciation for the last two years. Yet I see, chronically, appraisers stating that the market is "Stable" and failing to make any market change adjustments (referred to erroneously as "time" adjustments). What is going on is pure unadulterated laziness, to the point of fraud as the misleading element is outstanding, and appraisers with exceptionally poor training. Many of the same appraisal reports make all sorts of 4 digit adjustments, for minor crap like fences, while simultaneously ignoring 5 digit market condition adjustments, that should have been made, when market conditions is one of the most important adjustments of the top three of them that should be made.

 

[Joe Flacco]

Sounds like what is going on here is that the comps 1 and 2 are most similar to your house and sold for $270 / $285. Comps 3 and your neighbors house are similar to each other and better than your house and they sold for $340 / $350. So comps one and two are the best indicators of value.

The difference between 1 bathroom and 2 bathrooms is a big deal.