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Checking Stable Market. Instead of Declining

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cpower7

Thread Starter
Freshman Member
Joined
Feb 18, 2008
Professional Status
Appraiser Trainee
State
Florida
My Wife and I purchased a house in Cape Coral, Fl. Which is the on the west coast. We moved their from the east coast. The builder was offering the house for $349,000 and said that it would appraise for $400,000. We agreed on $329,000 only if the house appraised for $400,000. The builder selected an appraiser. And Surprise the appraisal came back at exactly $400,000. We bought the house believing that we had around $65,000 instant equity. We put $32,000 down on the house. We closed on the house in April of 2007. About 6 months after we moved in we decided to relocate due to no jobs. At that point we find out that the house is worth about $275,000 and dropping. The question is how can a house in a "Stable Market" (that's what the appraiser checked) be worth $400,000 and six months later be worth $275,000. I purchased this house because of the equity I believed I was getting. Also how could the bank approve this appraisal. Also the appraisal had only one inside pic. It was the kitchen and it wasn't even my kitchen. It was from another house around the corner. Is there anything that I can do about this situation? Other than make a complaint to the state. That doesn't help me at all. Any insight would be helpful. Thank You!
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
If the home was really worth $400,000 as the builder told you, why did they not sell it for $400,000?
 

jay trotta

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Feb 8, 2004
Professional Status
Certified Residential Appraiser
State
Connecticut
you moved from the East Coast to the West Coast and were unaware of the sinking Fla. market ??

#1- You said the builder selected an appraiser, but you took out a Mortgage, so I would assume the Lender had an appraisal also (I hope so) - what did the Lenders appraisal come in at ??

#2- Hire an extremely knowledgeable attorney, in Real Estate Law
 

cpower7

Thread Starter
Freshman Member
Joined
Feb 18, 2008
Professional Status
Appraiser Trainee
State
Florida
If the home was really worth $400,000 as the builder told you, why did they not sell it for $400,000?

We were told that they were not building anymore homes and just wanted to sell what they had. They made money on the sale without selling for $400k. The point is the Appraiser and the bank both agreed with the stable market. Had he checked declining market I would not have bought the house. I believe the builder told the appraisal company we need $400k to make this deal go thru and they came up with $400k.
 

cpower7

Thread Starter
Freshman Member
Joined
Feb 18, 2008
Professional Status
Appraiser Trainee
State
Florida
you moved from the East Coast to the West Coast and were unaware of the sinking Fla. market ??

#1- You said the builder selected an appraiser, but you took out a Mortgage, so I would assume the Lender had an appraisal also (I hope so) - what did the Lenders appraisal come in at ??

#2- Hire an extremely knowledgeable attorney, in Real Estate Law


I didn't see any appraisal from the lender. But they must have agreed with the appraisal sent to them. Because they funded the loan.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
Markets are not cut and dry and behave kind of oddly. Based on this one graph for Cape Coral below, values were increasing or stable during the first quarter and into the second quarter of 2007 and then dropped like a stone. It could very well be you just happened to buy at the very peak of the market and got caught holding a hot potato.


http://www.trulia.com/real_estate/Cape_Coral-Florida/
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
We were told that they were not building anymore homes and just wanted to sell what they had. They made money on the sale without selling for $400k. The point is the Appraiser and the bank both agreed with the stable market. Had he checked declining market I would not have bought the house. I believe the builder told the appraisal company we need $400k to make this deal go thru and they came up with $400k.

Once again, if the builder could have sold it for $400,000 they would have. Appraiser's do not set market values, they only report on it. Yes, based on your info, this appraiser did a skippy type job of reporting on the market, but some of the blame belongs to the person in the mirror for not doing the proper due diligence on your own purchase.
 

LA Woman

Member
Joined
Jul 18, 2007
Professional Status
Certified Residential Appraiser
State
California
CPower 7 - So sorry to hear of your loss.

Did you have a copy or did you view a copy of the appraisal to see that the "STABLE" box was checked, and did you see that prior to signing/closing? Its rare in my area that the borrower gets to see the appraisal.
 

cpower7

Thread Starter
Freshman Member
Joined
Feb 18, 2008
Professional Status
Appraiser Trainee
State
Florida
CPower 7 - So sorry to hear of your loss.

Did you have a copy or did you view a copy of the appraisal to see that the "STABLE" box was checked, and did you see that prior to signing/closing? Its rare in my area that the borrower gets to see the appraisal.


Yes, I had a copy and still do. The stable box is definitly checked.
 

cpower7

Thread Starter
Freshman Member
Joined
Feb 18, 2008
Professional Status
Appraiser Trainee
State
Florida
Once again, if the builder could have sold it for $400,000 they would have. Appraiser's do not set market values, they only report on it. Yes, based on your info, this appraiser did a skippy type job of reporting on the market, but some of the blame belongs to the person in the mirror for not doing the proper due diligence on your own purchase.


I thought by hiring an appraiser to determine the homes market value that I was doing my due diligence. But it seems that the appraiser was more interested in pleasing the builder in order to get more business instead of acting as an impartial party. He fully went into the assignment knowing he had to get $400k. The contract was only for $329k
 
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