No Appraisal Before An Offer: Bad Advice

[Julio E. Sune Jr. (FL)]

http://www.miami.com/mld/miami/classifieds...ate/4117205.htm

The article surprised me as JGG has written good articles before.

From the article: " When an appraisal is ordered prior to a purchase agreement being bilaterally accepted, the appraisal often comes in at less-than-market value".

" Absent an offer, the appraiser often errs on the conservative side"
[That is like saying that an appraiser is more or less like a form filler who needs a "target number" in order to "fill-the-form"

I am sure there are many in this forum who will agree with me that " appraised value is not the number needed in the file in order to make a deal go through".

Appraised Value is an opinion of HOW MUCH IS IT WORTH.

From My Files:
CASE STUDY : I got a call from an old lady who wanted to sell her house in my neighborhood. She had an offer of $170,000.00. Something was not right, the offer appeared too low for the area. I utilized 5 sales and came in at $225,000.00. I sat down with her and explained the market analysis. She almost started crying as it turned out the buyer was a relative of the realtor who presented the offer "out of the blue". She thanked me many times and she fully understood that she was getting "a low ball offer"
.

:evil: :evil: :evil: :evil: :evil:

 

[Pamela Crowley (Florida)]

It almost makes me nauseated that so many think an appraiser needs a target number to hit to do an appraisal.

It absolutely does make me ill that too many appraisers really are like that. :twisted:

3 'trainees' I've had over the past few years that came out of the same sweat shop that had to have a target number to be able to pull comps. That's how they had been trained, that's all they knew how to do, some are now certified and training more to be just like them.

Good story Julio, from your files. That's a real feel good story and I'm proud of you and all others that do this kind of real appraisal work that stops a bad guy.

 

[John M. Parker]

Let's look at the writers qualifications. Real Estate Agent. What does it take to be a real estate agent, in my state it's 90 hours of inferior education and a written exam every retired person could pass. I have had a brokers license for 13 years, Dah.

What is their motivation to be honest ---------- sorry I'm still trying to come up with it. Is it the loss of a commission check if they tell the truth and give the buyer or seller good advice?

I have been in the real estate business for a long time, heard every lie, exageration and type of poor advice and 9 times out of 10 it is told to save a close of escrow, commission check or listing.

You will love this one. Got an assignmnet to appraise a manufactured home in Cottonwood AZ. Pre-HUD, nice condition, well landscaped yard etc. Purchase contract $119,000, comps $89,000 and three in the immediate neighborhood. Buyer is glad he found out before they closed and backed out of the deal. Listing agent calls, sends 13 "Comps" up to 28 miles away that will support her "value" no!!!! sales price.

Asked her, Carol Ann do you think that these "Comps" are similar to your property, they are all in superior neighborhoods, newer and larger. Carol Ann says "No" but John I know in my heart this house is worth $119,000. Why I ask? Because I've got a contract for that much.

I love what I do, never had such a good job in my life, make lots of money and free entertainment, better than you can get on TV, just ask a real estate agent what a property is worth and why. Have a nice day.

 

[Tim Hicks (Texas)]

Can you imagine the chaos that would be caused if no target number or sales price could be disclosed to the appraiser? I wish it were that way. I also wish that all appraisals had to filed with the state, that way a second appraisal could not be ordered. But sadly, that is how out industry is trained and controlled. There are too many in our profession that "need" that target number and could not function without it. The down side to my wishes is that there are too many appraisers who would under value a property without a target number too.

 

[Wally Jones]

Take the lender out of the appraisal picture and never let us see a sale price or "estimate of value" prior to completing the appraisal. A true picture of the market? We may be the only group which advocates such radical thinking, therefore, it'll never happen. In the meantime, we do the best we can.

Good job, Julio! I needed a case history like yours to feel better this week. I have an extremely angry homeowner who is making lawsuit noises. His home was built in Feb. 2001 and he's attempting to refinance. Enter the bad guy (that would be me). Five comps within one and a half miles (a "semi-rural" area beginning to see suburban development). All five comps supported a value around $160,000. Turns out the appraisal for his construction loan was $200,000. (Wanta venture a guess what his total finance amount was?) Lender forwards the appraisal with request to reconsider our value. Okay. Yup, reconsidered value is still $160,000. Other appraisal found some really nice comps - eight to ten miles away. They used three comps and made an across the board adjustment for "inferior construction quality" of $28,400. I still haven't figured out the magic formula they used to arrive at such a precise figure. Their justification for the adjustment was that the subject's builder was known for his superior construction quality. Hmmmm. Okay. Research reveals two out of their three comps were built by the same contractor. Uh-oh. Maybe he had a bad day when he built those? Anyhow, I recommended the lender get another opinion or send both appraisals for review. Sorry for the rant, but y'all got me started. There, now I feel better.