MH appraising for more than it sold 8mos ago

[hglenbetts]

Is it possible that 380 days on market (through your declining market) stigmatized the property to the extent that it caused a decline in value?

Can you determine the absorption rate at time of first sale? Supply and demand of that particular type of property may have changed more favorably then the rest of the market.

Good Luck

 

[Mztk1]

I don't get how a house that sold for $60,000 financed by the owner with $10,000 down becomes a $50,000 sale.

To me, the buyer had to pay $10,000 up front and the owner financed the $50,000. To find the cash equivalency of the total sale you'd have to know the interest rate that was prevelant at the time and the interest rate the owner charged (if indeed the owner did the financing). If the interest rate favored the buyer the cash equivalency sale would be lower, but if it favored the seller the cash equivalency of the sale would be higher. More than likely the interest rate was somewhat competitive though and there is not net effect.

Example (borrowed from "allbusiness.com"): A MFH sold for $100,000, with $25,000 cash and a $75,000 note to the seller at 6% interest with 20-year amortization . The market interest rate was 12% for such a mortgage. Although the mortgage carries a $75,000 face value , it is worth only $49,000. Therefore, the seller received a cash equivalent price of $74,000 ($25,000 cash plus a mortgage worth $49,000) in the transaction. This is much less than the $100,000 amount of sales price.

 

[c w d]

I don't get how a house that sold for $60,000 financed by the owner with $10,000 down becomes a $50,000 sale.

To me, the buyer had to pay $10,000 up front and the owner financed the $50,000. To find the cash equivalency of the total sale you'd have to know the interest rate that was prevelant at the time and the interest rate the owner charged (if indeed the owner did the financing). If the interest rate favored the buyer the cash equivalency sale would be lower, but if it favored the seller the cash equivalency of the sale would be higher. More than likely the interest rate was somewhat competitive though and there is not net effect.

Example (borrowed from "allbusiness.com"): A MFH sold for $100,000, with $25,000 cash and a $75,000 note to the seller at 6% interest with 20-year amortization . The market interest rate was 12% for such a mortgage. Although the mortgage carries a $75,000 face value , it is worth only $49,000. Therefore, the seller received a cash equivalent price of $74,000 ($25,000 cash plus a mortgage worth $49,000) in the transaction. This is much less than the $100,000 amount of sales price.

I don't know. From the wording I'm assuming the seller is putting $10K down for the buyer. Seems like the seller is losing $10K and buyer is making $10K in equity. *shrugs* The Realtor never called me back, of course.

 

[hglenbetts]

I just noticed on the MLS listing for the subject a comment "Owner financing with $10,000 down to qualified buyer". I'm guessing it's a concession? Cash equivalence to the seller is $50,000. I've got a call into the Realtor.

The way I read that, is the seller will offer financing to a qualified buyer who has $10,000 to put down, not that the owner is giving a $10,000 discount. That would mean that the seller ether became a Mortgagee on the property he sold, or he has given a land contract. Aren't you able to check the public record for sales price and if there were any mortgage recordings? Here in the north country, if it was a land contract sale, there would be a "memorandum of land contract" instead of a deed, filed with the county.