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CANative

Thread Starter
Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
I have such an irritating area to appraise in.

This assignment is for a 1987, 1300+- sf, SFR, 2+ den and 2 bath with a pretty good lake view. Very good (almost like new) condition and updating.

Market data shows a 20%+- decline in pricing overall for the county and similar for this type of house in this particular subdivision. Marketing time up 50 days compared to the same period in 2006. Total sales in 2007 was 11 versus about 17 or 18 per year in 2005/2006.

This is a mid-range house. Trouble is with so few sales all I have are a handful of low end, non view houses, and high end great view houses. I have one very recent sale of a similar enough house at $330,000 to hang my value on that sale. The other two or three lower end houses I appraised a few years ago and they have lots of deferred maintenance, inferior views, lack of updating and one is a early 70's modular. They sold in the $220,000 range.

So I was looking for another comp and found one that sold in July in the next subdivision over. That subdivision has only had 4 sales in the last year. Very similar to the subject but sold for $326,000. If I make a 10% downward adjustment for changing market conditions it puts it about $30,000 less than I'm coming up with for the subject. But I noticed it had been on the market for more than 440 days at $439,000. Looking at the listing history I suspected a "panic" sell. So I called the listing agent who confirmed my theory.

But I'm kind of concerned how this will look to an underwriter now, a reviewer later and perhaps a lawsuit at some time in the future.

Anyone else having these kind of problems?
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Yeah Greg, I agree, the single most complex-making factor in a strongly declining market is the lack of recent activity.

The second most complex-making factor is eratic trends with panic selling on the one hand and stubbornness on the other hand.

I've been stressing about that, too.
 

stefan olafson

Senior Member
Joined
Apr 2, 2003
Professional Status
Certified General Appraiser
State
North Dakota
It's time to start using those extra pages our software people have. Sales in the neighborhood (3), sales outside the neighborhood (next 3), then listings in the neighborhood (Comps 6-9).

Then a long and detailed narrative following the sales and a long and detailed reconciliation of value. I think I'd even to the cost approach to show cost new and value as depreciated.

CYA is the most important thing in times of decline and uncertainty in the market.
 

Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
suggest the $330 and the 326k reflect the current market. the 326k was grossly overlisted........ THAT factor is RAMPANT all over. the other sales noted clearly not comparable. any UC similar to the 300 and 326 sales would confirm current market.
 
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