Ray Miller
Elite Member
- Joined
- Feb 20, 2002
- Professional Status
- Licensed Appraiser
- State
- Wisconsin
What is with real estate agents doing market analysis for banks. Then bank taking the information as factual. Had two subjects today.
The first one I look at it at 05:00 this morning. The owner is telling he knows what it is worth. I ask why he needed me then? “Well the lender will not take this market analysis that I had done for my divorce. They want an appraisal.”
He then hands me the market analysis so I can be sure and get above the value on it. He used it to settle with his x-wife. The market analysis says the property is worth $389,000. The comparable’s used were 8 active listing and 3 closed listing. The closed listing were $30,000 to $50,000 less then the 8 active listings and were just used as support for the active listings. The 8 active listing were 35 to 75 miles from the subject. Some were on water and some on golf courses. This guy has 42 acres of ag and swamp land with a one acre spring fed pond. A 2 story remolded 100 year old brick home.
He thinks the market for his subject is $400,000 plus. When the best comparable’s in the area are binging it in at $210,000.
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The very next subject was new construction raised ranch, 1700 GLA, 2 bedroom 2 bath, living room, dinning room, kitchen and four season sun room, basement not complete. Excellent construction above average material used in the subject. But not superior material. Subject is on 5 acres of woods. Has what the owner calls a six car garage. What I would call a three car, with shop office and storage. Comparable’s range in area 10 mile rural radius $35,000 to $150,000.
The bank had a market analysis done on the area, before construction. Had the real estate agent go over the plans and cost pre construction. The analysis came back that the area would support the $350,000 of the subject property.
The owner told me that the real estate agent had told the banker that she needed to go out of the area to find the comparable’s. After looking at the analysis, she went out of the area by 60 miles to find comparable’s.
He is now ready for long term financing and needing a loan of $320,000.
I am just going to complete the appraisal with local comparable’s send it in, put on my flack jacket and helmet, dig my fox hole a little deeper and wait for the yelling and phone calls.
But I am seeing and hearing of real estate agents doing more and more of these. They really haven’t a clue as to value. All that I get my hands on, are so far out of value that it would scare stripes on a zebra or cause a jackass to bray all night. What gives??
The first one I look at it at 05:00 this morning. The owner is telling he knows what it is worth. I ask why he needed me then? “Well the lender will not take this market analysis that I had done for my divorce. They want an appraisal.”
He then hands me the market analysis so I can be sure and get above the value on it. He used it to settle with his x-wife. The market analysis says the property is worth $389,000. The comparable’s used were 8 active listing and 3 closed listing. The closed listing were $30,000 to $50,000 less then the 8 active listings and were just used as support for the active listings. The 8 active listing were 35 to 75 miles from the subject. Some were on water and some on golf courses. This guy has 42 acres of ag and swamp land with a one acre spring fed pond. A 2 story remolded 100 year old brick home.
He thinks the market for his subject is $400,000 plus. When the best comparable’s in the area are binging it in at $210,000.
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The very next subject was new construction raised ranch, 1700 GLA, 2 bedroom 2 bath, living room, dinning room, kitchen and four season sun room, basement not complete. Excellent construction above average material used in the subject. But not superior material. Subject is on 5 acres of woods. Has what the owner calls a six car garage. What I would call a three car, with shop office and storage. Comparable’s range in area 10 mile rural radius $35,000 to $150,000.
The bank had a market analysis done on the area, before construction. Had the real estate agent go over the plans and cost pre construction. The analysis came back that the area would support the $350,000 of the subject property.
The owner told me that the real estate agent had told the banker that she needed to go out of the area to find the comparable’s. After looking at the analysis, she went out of the area by 60 miles to find comparable’s.
He is now ready for long term financing and needing a loan of $320,000.
I am just going to complete the appraisal with local comparable’s send it in, put on my flack jacket and helmet, dig my fox hole a little deeper and wait for the yelling and phone calls.
But I am seeing and hearing of real estate agents doing more and more of these. They really haven’t a clue as to value. All that I get my hands on, are so far out of value that it would scare stripes on a zebra or cause a jackass to bray all night. What gives??
). And again, my point was, they shouldn't be doing a CMA to get financing for construction, sell or divorce settlements. Bankers, MB's, etc., shouldn't be permitted to make loans based upon that either.