Bill would let appraisers 'round up' home values

[CANative]

If a difference in probable price is found between properties which are otherwise comparable except for REO/short sale status, that difference supports an adjustment for Stigma.

Find "flips" where little or no repairs or alterations were done. Analyze to see the price difference between a bank selling the property and someone else selling the same property later on (stigma/stigma gone.)

 

[JSmith43]

Find "flips" where little or no repairs or alterations were done. Analyze to see the price difference between a bank selling the property and someone else selling the same property later on (stigma/stigma gone.)

IMO it's not an ideal benchmark for stigma measurement, but I'd sure glom onto it as it would tend to support a greater than or equal adjustment.

The reason I say this is that a flipper usually tries to get in and out of there quickly and typically doesn't have the option to not sell (quietly enjoy) the RE.

But, heck yes, that would be useful data & data that shouldn't be ignored by appraisers duped into neglecting such an analysis by others issuing proclamations that "REO's dominate the market" or "REO's are the market."

Those "others" aren't signing off on your report & it is not set in stone that push back will only come from investors seeking repurchase of a closed loan based upon high value. It could be based upon faulty analysis not detected or understood by the originating company.

There are on going educational efforts under way Maybe it's not so ironic that Freddie recently clarified its position in a previous mortgagee letter that could have been spun like C & R presumption 1.

 

[CBBoston]

I thought Nevada was one of those strong Tea Party states? Aren't they all about the free market system? How does this line of thinking jive with that philosophy?

 

[Mile High Trout]

In the real world -

10 liquidation offers vs 1 non liquidation offer available in the marketplace means the 1 non-liquidation offer is dead meat.

The position that they're selling for less than they cost to build is an unfortunate side effect of building so many homes, then letting them go out the door with dangerous financing.

The last time I checked, when a producer of goods has too much goods to sell in a reasonable time frame, they must liquidate them in order to make way for new stock. As a consumer of products myself, I'm well aware of this because I pay attention to the comparative price of clearance items.

Builders should have thought about that when they offered in house financing to anyone with a pulse.

Nobody prohibited builder sellers from counseling buyers on responsible long term home ownership methods, and responsible financing to assure long term home ownership. Correction - They may have prohibited themselves because they oftentimes purveyed such dangerous financing or said nothing about it when it was being injected into their new home market, for their own short term goals.

What I've taken from this story: Make insane decisions which do not hold water in long term considerations. Reap the profits of short term thinking. When the stuff hit's the fan, hire a VIP to bail you out of the mess.

This sounds like a legal prescient that would cross the lines away from real estate to other products in no time. No clearance pricing allowed if the seller is oversupplied?

Perhaps the flaw lies not in the fact there is liquidation stock, but rather the subsidy supplied to lenders when they liquidate the stock at unreasonably low prices while also making headway on the margins through insured subsidies.

Would they be complaining if they could pick them back up with a wide margin on the distress sale, then resell them for profits again, winning on both sides of the coin. You won't hear that in the news.

 

[AnonApprsr]

REOs are in the market just like other real estate. It's not a mystery.

 

[PropertyEconomics]

The "bill" is an idiotic way of once again falsely propping up the real estate market. Face it ... had rates risen, foreclosures happened, and the bottom hit ... we would be well on our way out of this mess now.

Instead we prolong the inevitable and will suffer anyway. More prolonging of the facts of the market and our economy is stupid in my opinion.

 

[Riick]

The "bill" is an idiotic way of once again falsely propping up the real estate market. Face it ... had rates risen, foreclosures happened, and the bottom hit ... we would be well on our way out of this mess now.

Instead we prolong the inevitable and will suffer anyway. More prolonging of the facts of the market and our economy is stupid in my opinion.

If our luck looks like the recent spate of Blizzards, Tornados, Floods,
Falling Bridges, Hank Paulsons, & Ben Bernackes, we could have the
TWENTY YEAR down-cycle in real estate that the Japanese have suffered.

....Just when they thought the worst was over,
values dropped, again, and again, and again.

 

[PropertyEconomics]

If our luck looks like the recent spate of Blizzards, Tornados, Floods,
Falling Bridges, Hank Paulsons, & Ben Bernackes, we could have the
TWENTY YEAR down-cycle in real estate that the Japanese have suffered.

....Just when they thought the worst was over,
values dropped, again, and again, and again.

I would nto be at all surprised if we dont have another 10 years of down market and frankly 15 - 20 would not surprise me. We are in deep kim chee.

 

[SANDY]

Stigma shmigma

10 REO sales versus 1 so called market sale with numerous REO's still for sale tells me the market is primarily a REO driven market so I would be much more inclined to adjust the market sale downward rather than adjust the REO's upward for a stigma. Nice try Mentor.

 

[VegasWayne]

In the real world where this bill would law there are neighborhoods that have not seen a non-distressed sale in the past three years. There were once non-distressed listings, but they never sold or they became distressed. The bill would prohibit the use of REO's and shorts so determining an adjustment would be a waste of time since you could not use the sale as a comparable.