Now I'm Really Steamed!

[Blue1]

Koert,

Have to agree with your synopsis of the buyer's agent. However, here are some more facts. There are only 2 recent comparable sales within 25 square miles of the subject and, as I mentioned, they are 10K below the sale price of this home. There are NO comparable listings. This is an ultra-small subdivision (5 steets MAYBE) next to a recreational area. The two other sales are stick-builts. The stick builts are 30K above the sale price of the subject and over 25% larger. Historical sales (1 year ago) are at 40K BELOW the sale price of the subject. The most recent comparable sale was 1 month ago. There is absouletly no support for a sale price 10K above the best comparable sale (1 month ago). I could "schlock" it out and "come in" at the sale price but the underwriter would just shoot it down. One of two things are going to happen: 1) The other appraiser will come in at the sale price and the loan will go through 2) The other appraiser will come in at the sale price and the loan won't go through.

In the #1 scenario I lose and the buyer's (whom I'm representing) lose.

IN the #2 scenario the buyer's (whom I'm representing) are saving 10K on an overpriced home.

Just my opinion........

 

[MARKETVALUE]

Blue,

Looks like you just posted as I was.....

25 Square Miles???? What are you going to define your neighborhood as? Only two MH sales within that mileage distance? I wouldnt loan my money on this one if they were paying half of what the contract price is....

It will be interesting to see what underwriting does with the appraisal regardless of what value it comes in at. It wouldnt suprise me if they shoot it down no matter what...

Good luck

MRM

 

[jtrotta]

Blue1 - you just noted that sales from 1 year ago were 40k below sale price of the subject; what's that telling you about the current market trend :?:

OR do you forget about what was happening during that period :?:

What were the interest rates during that period :?:

Again, you remind us that the more recent sales are 10k below sale price, can you determine growth :?: And how old were those sales :?:

Am I being of any help here - feel like I'm talking to myself, answer up :lol:

 

[KD247]

Blue,

Yikes! What a rotten assignment. You're going to have a tough time "proving" anything with the data you have.

If I had this job, I'd probably: 1) Analyze the best data that brackets the subject's sales price and physical characteristics. 2) Demonstrate that the subject's upper limit of value, as set by current listings, is well above the estimated value. 3) State that, per the sales agents and the lender, there are no unusual concessions or motivations, that the buyers are well informed. 4) Make a comment that values for this type of property are not as precisely set as for more conventional homes. 5) Note that I am relying heavily on the current contract as the best evidence of market reaction to the subject, then estimate the value at the current contract price.

On this type of job, the underwriter is bound to come back with "Please provide 18 listings and 6 additional comparable sales that have sold within 1/2 mile of the subject and in the last six months", so I try to clearly state that the data used is the best available and there just isn't anything else to look at.

This would be a perfect example of a case where the appraiser should stand in front of a loan committee and explain the situation. With a clear understanding of the situation, the bank probably wouldn't lend more than 50%.

Blue, I don't mean to sound like I've got this completely figured out. This forum is great place to throw ideas out and see if anybody else points out an obvious flaw in the thinking. In this case, I know from past experience that more appraisers would see it your way than would see it my way.

 

[Blue1]

Koert,

I truly appraciate your counsel in this situation. I apologize for not posting more data in my first post but I was seeing RED at the time. You bring up some very good points that I can use in the future. In my area we have a severe lack of available inventory due to a Market surge. Months from now, if this trend continues, sales will be few a far between. I'm just now getting a handle on how diffucult appraising in a rapidly rising Market can be.

MarketValue:

I said the only COMPARABLE sales in 25 square miles. My neighborhood is defined as the subdivision the subject is in which is surrounded by boondocks. There are other manuf. home sales within the subdivision (besides the two comparable ones I mentioned) but they are older, no foundation and mostly built before '76. Outside this small subdivision, there are a few scattered sales but they are all on 5 to 20+ acre parcels.