• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

Bank owned sales

Status
Not open for further replies.

john marcinik

Thread Starter
Sophomore Member
Joined
Apr 13, 2004
Professional Status
Certified Residential Appraiser
State
Maryland
How about some input here folks? I received an FHA request in Prince William County, Virginia. I looked over 93 sales so far and they are all bank sales. No foreclosures or short sales. Sales of homes owned by the bank and being sold through Realtors.

I did find one "traditional" listing that is listed about $75K over the bank sales. Your comments are welcomed on what you would use for comparable sales.
 
Last edited:

Randolph Kinney

Elite Member
Joined
Apr 7, 2005
Professional Status
Retired Appraiser
State
North Carolina
How about some input here folks? I received an FHA request in Prince William County, Virginia. I looked over 93 sales so far and they are all bank sales. No foreclosures or short sales. Sales of homes owned by the bank and being sold through Realtors.

I did find one "traditional" listing that is listed about $75K over the bank sales. Your comments are welcomed on what you would use for comparable sales.

If you are saying there are no comparable closed sales that are not bank owned (REO), then you have a market area that is completely dominated by the results of foreclosures. That is your market for choosing comparables. Be sure to analyze and report that.

Is this for a refi?
 

john marcinik

Thread Starter
Sophomore Member
Joined
Apr 13, 2004
Professional Status
Certified Residential Appraiser
State
Maryland
FHA

It's an FHA reverse mortgage and thank you.
 
Last edited:

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
I would create a month to month listing report for the past twelve months. Then create some ratio of the sales per month and the new listings in respect to both price and the number of sales and the number of new listings. If the new listings are greater than the sales per month I would be aggressive with a market change adjustment and go with a higher adjustment with the anticipation of the new bank-own listings will continue to increase in the near future, 3-6 months.

The reverse mortgages are so dangerous for an owner and are expensive to close. A loan for $120,000 - $130,000 can cost $13,000 - $18,000 to close. Big pay day for the LO.
 

Tom Woolford

Elite Member
Joined
Nov 20, 2005
Professional Status
Certified Residential Appraiser
State
Florida
The reverse mortgages are so dangerous for an owner and are expensive to close. A loan for $120,000 - $130,000 can cost $13,000 - $18,000 to close. Big pay day for the LO.

Kevin, do you have a reference for that? I do quite a few Reverse Mortgages, but if the owners are getting screwed that bad I'm not going to take any more of them. Thats just plain gouging.
 

Green Hornet

Senior Member
Joined
Dec 29, 2006
Professional Status
Certified Residential Appraiser
State
Washington
Kevin, do you have a reference for that? I do quite a few Reverse Mortgages, but if the owners are getting screwed that bad I'm not going to take any more of them. Thats just plain gouging.

Kevin,


I agree that they are expensive, but not sure what you mean about the dangerous part. The loan amount cannot exceed the value of the home and the current interests rates reduce the owner's exposure.

As I have posted here before, my mother did a reverse a few years ago. It cost about $9000. Not all of it went to the LO. Some it was for gov fees. The lack of montly payments more than makes up the higher than conventional fees within 1 year.

The good side is that she was able to stay in her house and neighborhood. There are no monthly payments and I was able to stop my financial support to her. How do that say in the commercial..."Priceless"

All said, it has been a good experience for all of us

Edit, Sorry I meant to quote Kevin, not Tom
 
Last edited:

Michigan CG

Moderator
Staff member
Moderator
Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
How about some input here folks? I received an FHA request in Prince William County, Virginia. I looked over 93 sales so far and they are all bank sales. No foreclosures or short sales. Sales of homes owned by the bank and being sold through Realtors.

I did find one "traditional" listing that is listed about $75K over the bank sales. Your comments are welcomed on what you would use for comparable sales.

Foreclosure sales are your market. They are your comparables. I use them all the time. They are my market too.

Don't believe the folks who say foreclosure/bank sales are not to be used. That is BS.
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
The danger is when the home owner has minimal equity and the access to money stops in the near future. It can work when there is no mortgage at the beginning of the loan program, but if there a pay-off for an existing mortgage the program offers minimal economic benefits. The interest rates are adjustable and two points+ above the typical rate. There are monthly fees for the special checking account. You have to pay for an interview with an Attorney here in MA so the homeowner fully understands the program.

A LO who specializes in a reverse mortgages closed a six-million loan and received a $60,000 commission. The home owners own over 30-million dollars in properties and acquired the reverse mortgage to fund an insurance policy of him to protect the 30-million dollar + assets and to pay the inheritance taxes. The multi-million dollar home owner is an attorney. The LO at his expense flew down to the Caribbean to have the Attorney/Homeowner sign the closing papers.
 

murray stroupe

Senior Member
Joined
Apr 27, 2005
Professional Status
General Public
State
Tennessee
RE; Reverse Mo

Kevin,


I agree that they are expensive, but not sure what you mean about the dangerous part. The loan amount cannot exceed the value of the home and the current interests rates reduce the owner's exposure.

As I have posted here before, my mother did a reverse a few years ago. It cost about $9000. Not all of it went to the LO. Some it was for gov fees. The lack of montly payments more than makes up the higher than conventional fees within 1 year.

The good side is that she was able to stay in her house and neighborhood. There are no monthly payments and I was able to stop my financial support to her. How do that say in the commercial..."Priceless"

All said, it has been a good experience for all of us

Edit, Sorry I meant to quote Kevin, not Tom
===========================
Wonder what the risk/danger is to the borrower, [a]besides high closing costs,
risk of massive fraud like Countrywide Financial got sued for,[c] anything else???

My Mom, mostly lived in her own home, but for several years, found a perfect home , nice rural neighborhood, close to town, to lease.Nice neighboor hood,nice landlord nice acreage,with about 3 dozen super mature pine trees.But do to very sloppy logging of the pine beetle infested trees.....
Mom is moving.

Many people chose a neighbor hood,chose home with cost not number 1 on the list;
''priceless''. Think if the borrower lives much longer than average;
its risky for lender?????
 

ghrousseau

Member
Joined
May 5, 2006
Professional Status
Licensed Appraiser
State
Virginia
How about some input here folks? I received an FHA request in Prince William County, Virginia. I looked over 93 sales so far and they are all bank sales. No foreclosures or short sales. Sales of homes owned by the bank and being sold through Realtors.

I did find one "traditional" listing that is listed about $75K over the bank sales. Your comments are welcomed on what you would use for comparable sales.

John, the lender I work for does a large amount of government and conventional lending. Bank owned sales in Prince William can be the norm. In some areas like Loudon County for attached PUD you will likely have all REO comparable sales.
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks