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Loan Officers Have Nothin' On Re Agents

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Tim Hicks (Texas)

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
FHA assignment in a mid 1980's tract home addition. Sales Price-$72,900, or is it $76,200.

The listing has all the trademarks of a slam dunk appraisal. Everything except the property, of course. It is listed as a 3/1/1, (1,100SF) which is one of the smaller homes in the neighborhood, but at least there are some 3/1/1 comps. Upon inspection, I get the nice surprise of an add-on third bedroom. That is fine, except you have to go through the second bedroom to get to the third and the new "middle" bedroom has a bed sticking our of the former closet and the window is in the former closet. The bed barely fits where the old sliding doors used to be. So my first thought is "This is either a 3/1/1 with functional depreciation and cost to cure or a 2/1/1 with a study...sewing room...sitting room...whatever. Then I realize a greater problem, no two bedroom home sales except 18 months ago for $64,500. All the three bedroom comps are in the $70-76,000 range and they will require either a bedroom or functional adjustment.

Here is where the fun starts. The real estate listing agent and selling agent interaction.

I ask the listing agent if he has any sales that he would like me to consider or if he knew of any other two bedroom homes in the neighborhood that were listed as three bedroom homes (hey, if his is that way, so could others. It happens all the time, here). Agent attack mode comes in full force. "That is a three bedroom home" "Yes, it can be a three bedroom home with curable functional obsolescence or a two bedroom home. Either way, it will require an adjustment" "No, you guys just go by square footage, I just closed a 1,100 SF house around the corner for $74,000" "No sir, it is not quite that easy" "Plus, your sale only has one bath and all but one sale has two baths, that will require an adjustment" Now my favorite comment because it always comes out. "I have been selling homes for over 15 years and never had an appraiser question my sales price!" "Sir, that has absolutely nothing to do with this property and its functional problems and I have not completed my appraisal yet to establish my opinion of value. I will be glad to consider any sales you would like me to consider with the proper adjustments."

About 30 seconds later my cell phone rings. any guesses? The selling agent is wanting to know what I am doing to her sale. Her first response is that she already had that bedroom discussion with the listing agent and he assured her he had plenty of sales. I inform her that there is market reaction to bedroom and bath counts in this area and she will be informed by the loan officer of my value when I have completed the appraisal. "If you have any sales you would like me to consider, just let me know. Oh, by the way, I have two different sales contracts. The property is listed for $72,900, but I have one page that says $72,900 and one page that says $76,200." "Oh, the new sales price is $76,200 because the seller is paying $4,500 of the buyer's closing costs. You don't have to mention that do you?" "Yes, ma'am. I must disclose the seller paid concessions and the list price in my report".

As you well know, my cell phone rang not two minutes after that with the loan officer. And the story gets re-told again. I go back to the office and feverishly work the MLS looking for any sale that resembles a two bedroom home in the area and/or similar to the subject's original construction (900sf). No dice, but I did notice the subject is now listed at $76,200 with an original list price of $72,900. Good thing I have the four hour old listing printed with the original list price. I check neighboring additions and find four two bedroom sales in the $64-68,000 range.



I love my job. Where else can you be evil just by being honest. :twisted:

I wonder if another client bites the dust?
 

Tim The Enchanter

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Ah well, the usual pressure and the usual suspects. ;)
Bring it in where it belongs, and damn the torpedoes. :twisted:
Another "cut sale". :lol:
 
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