Leaving The Market Area To Get A Contract Price In Maricopa, Az

[Deleted member 80407]

The "scum-Bag" Realtor told him he was bull-headed and his anger suddenly became directed at both Realtors and Appraisers. This is common with appraisers as I have stated many times on the forum many appraisers are working in isolated environments and lose the ability to communicate with others in the industry. If I was James I would start attending Realtor functions and also get to know other local appraisers because he will quickly discover there are some great Realtors and Great Appraisers.

It takes 3 different sides to make a transaction happen. Mortgage originator, realtor and an appraiser. The appraiser is "SUPPOSE TO BE" non bias. There are appraiser's out their that do nothing buy cheat market value by pushing values the wrong way to meet contract price. To me this is being bias favoring the seller & client rather than being completely bias. FURTHERMORE, this is putting a buyer upside down in the loan. Think about it, would you like to get took for $10,000, $20,000 or $30,000 with interest being compounded for 30 years?????????? In the case of my assignment, there will be 1 sale supporting the subject's contract price, HOWEVER, this sale should not close because the subject subdivision had 8 recent sales (within 6 months) of similar properties with similar GLA's selling for $10,000 to $16,000 less. The appraiser for this sale as well as the realtor left the subject subdivision and went to superior competing subdivisions to obtain a value. HEY GUYS, I thought real estate values depend mostly on LOCATION, LOCATION, LOCATION. If this is not correct, my 25 years experience was all for nothing.

 

[CindyR]

Here is a perfect example of James original observation. Working on a refi and my preliminary comp search in the subject subdivision - all built in the early 90s, all within 200 SF +/-, shows 28 sales in the past year ranging from $125 to $190. Difference is some with their fancy new kitchens and some variation between 1 - carports and 2 - garages. And then there is that one sale at $227,500. Nothing spectacular in that listing and no obvious reason for it to sell 20% over the highest sale. I would guess some appraiser wandered far and wide to hit that contract price.

 

[David S. Roberson]

Wonder what will happen when a buyer finds out that he over paid and walks from the mortgage.

I'll be back to doing REO's like it was 2009 again. Just wait for it.

 

[RSW]

A person who cannot afford to put down more than 2.5% should not be put into a property UPSIDE DOWN. Like I said before, market data within this identified market does not support the contract price. I suppose there are appraiser's out their that think it is their job to hit contract price every time, even though it is above market value. Wondering how many out their will leave a market and go to a superior market to hit a contract price? Probably too many because they think it is easier to cheat the market rather than deal with the client because the contract price cannot be supported. Just remember, the government probably will not bail out the banks if they fail again and therefore, someone will have to pay ~ maybe appraiser's???

There were a lot of appraisers trained in the 1990s and early 2000s that were taught to use the contact price as a target . Many of them could not even start the appraisal process without a target to aim for. Sadly, many of them are still in the business today.

 

[ucbruin]

Buyer lacks much of down payment. They find a couple of scenarios. Which do you think will sell higher? Buyer has enough money for 3% down payment but not enough to pay the 6% in closing costs. Assume identical houses.

A) Asking price of $100,000 and the seller is willing to kick back 6% closing costs to the buyer
B) Asking price of $95,000 and the seller will not give any money back for closing costs.

House A they will need $3,000 down payment, which they have, and the seller will pay the $6,000 in closing costs. House B they will need $2,850 for the down payment, which they have, but they they will also need $5,700 in closing costs which they do not have.

Now what if the buyer had $40,000 in the bank and could easily absorb the 20% down payment and closing costs, which would they buy?

A bit off topic of James post but trying to answer why down payments can matter, as well as closing costs of course.

I've never attended, on site or online, an appraisal course that ever mentioned borrower's down payment %.

Maybe I have but have forgotten....

 

[Michigander]

I've never attended, on site or online, an appraisal course that ever mentioned borrower's down payment %.

Maybe I have but have forgotten....

I am just trying to explain a concession. Look at what somebody who gets a concession is willing to pay versus one that doesn't. Maybe I shouldn't have added in a large down payment. My point was the borrower who gets the concession is often, very often, willing to pay more so that they can actually get the house versus pay less and not be able to afford it.

It is off topic of the conversation that James started.

To the original post about crossing out of the neighborhoods to get sales that need the number, absolutely do not see the rationale of it unless it is adequately addressed and precisely why. Maybe there is a reason other than searching for a number. Who knows unless the report actually explains it