I'm not an appraiser. Just an average person trying to purchase a home. Can any professional appraisers please give their opinion on the following?
The home is an REO home in Volusia County, FL 32713. Appraisal came in at $355k noting declining market and surplus of homes. Now of course the 100% financing I was well qualified and pre-approved for is reduced to a 95% LTV. This is what I would like to know please.
1. The goal of the appraiser is to accurately place a value on the specific property they are contracted with to do so. Is this correct?
2. Based on my research, Announcement 07-11 explains how notations for declining markets should be noted. I've heard there is some "place" on the appraisal for such notations. The intent of these new pieces of data is to reduce the risk to lenders should the buyer default. Is this correct?
3. It appears that lenders seeing an appraiser's notation regarding a declining market will reduce the LTV to 95%, 90%, or in extreme cases 85%. This would be to give the lender a "cushion" to help reduce losses in the event of foreclosure. Is this correct?
Assuming the above 3 statements are true? If a particular appraisal on a specific home (mine for example) was appraised at $355k as noted and specified as declining, would you reconsider restating the declining market note as stable if the lender disputed the appraisal based on the facts above and the loan value of the home is actually only $275k. Since the purpose of declining market notation is to protect the lender, and they want from 5-15% downpayment to cover the declining value should it actually occur, would you as an appraiser look at it this way? "The loan value of $275k is only 77% of my appraised value of $355k. If the bank wants a buffer of 5-15%, I can see that even if this area is a declining market, this home has a much greater "buffer" than that 5-15% and therefore the accurate appraisal of THIS property will NOT be affected by the declining market notation and I feel the lender is still protected and my information is correct to change my notation to STABLE?"
It seems to me that some appraisers are trying to appraise a state or MSA instead of the specific home they were contrated to appraise. Any help or thoughts on this are greatly appreciated.
Thanks, Tracy
The home is an REO home in Volusia County, FL 32713. Appraisal came in at $355k noting declining market and surplus of homes. Now of course the 100% financing I was well qualified and pre-approved for is reduced to a 95% LTV. This is what I would like to know please.
1. The goal of the appraiser is to accurately place a value on the specific property they are contracted with to do so. Is this correct?
2. Based on my research, Announcement 07-11 explains how notations for declining markets should be noted. I've heard there is some "place" on the appraisal for such notations. The intent of these new pieces of data is to reduce the risk to lenders should the buyer default. Is this correct?
3. It appears that lenders seeing an appraiser's notation regarding a declining market will reduce the LTV to 95%, 90%, or in extreme cases 85%. This would be to give the lender a "cushion" to help reduce losses in the event of foreclosure. Is this correct?
Assuming the above 3 statements are true? If a particular appraisal on a specific home (mine for example) was appraised at $355k as noted and specified as declining, would you reconsider restating the declining market note as stable if the lender disputed the appraisal based on the facts above and the loan value of the home is actually only $275k. Since the purpose of declining market notation is to protect the lender, and they want from 5-15% downpayment to cover the declining value should it actually occur, would you as an appraiser look at it this way? "The loan value of $275k is only 77% of my appraised value of $355k. If the bank wants a buffer of 5-15%, I can see that even if this area is a declining market, this home has a much greater "buffer" than that 5-15% and therefore the accurate appraisal of THIS property will NOT be affected by the declining market notation and I feel the lender is still protected and my information is correct to change my notation to STABLE?"
It seems to me that some appraisers are trying to appraise a state or MSA instead of the specific home they were contrated to appraise. Any help or thoughts on this are greatly appreciated.
Thanks, Tracy