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R.E.O Appraisal Listed/Sold

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Joe Booth

Thread Starter
Junior Member
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Oct 16, 2003
Professional Status
Certified Residential Appraiser
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California
I appraised a two family a few months ago. It needed mostly cosmetic work and was across the street from a nice park. I appraised it for $398K. It went on the market after my appraisal for $299K and sold for $300K in less than a week. The Trustee Deed Transfer from the prior foreclosure had a transaction amount of $405K.

Is something rotten here?
 

Scott Kibler

Elite Member
Joined
Oct 7, 2003
Professional Status
Certified Residential Appraiser
State
Illinois
I've heard that recently the magic number for subprime assets is 65%.

If they can quickly liquidate a non performing asset for 65 cents on the dollar they will do it.

In your case, they got some 75%, not bad assuming this was a subprime asset..
 

Lloyd Bonafide

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Jan 15, 2006
Professional Status
Certified Residential Appraiser
State
California
Some REOs seem to be priced way too high, and some too low. I'm guessing that this client also had a BPO done, which came in way below your value.

The $405,000 transaction value from the trust deed sale was probably the previous loan amount, and may have no relevance to the property's current market value.
 

D-Max

Junior Member
Joined
Apr 26, 2003
Professional Status
Certified Residential Appraiser
State
North Carolina
I was told that they only get an appraisal to support the BPO that they are going to base the list price on.

had one recently where the Appraisal was $40,000 and the BPO was $42,000. Trustee's deed indicated $45,000 so the Asset management company listed it for $59,000 and refuses to drop the price. NO second or HELOCs that could be found. I know of one offer for $37,000 CASH that was turned down flat.
 

Mike Garrett RAA

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Professional Status
Certified Residential Appraiser
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Colorado
Something isn't right.
 

Joe Booth

Thread Starter
Junior Member
Joined
Oct 16, 2003
Professional Status
Certified Residential Appraiser
State
California
So... This is where the Massachusetts pention funds are going.
 
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JENIFFERW

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Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
I've heard that sometimes the bank will order two or more appraisals, as well as at least one BPO. They might even also do an AVM? I think they look at all available information (appraisal info and credibility, BPO info and credibility, market condition info, how much they are into it for, and how much they are willing to lose) then decide what they want to list it for. I think some banks price aggressively, and some just want to dump it quickly.

Like Lloyd said, the amount of the trustee's sale is not relevant. That would be like saying the previous appraisal price should be considered, but how do you know it wasn't previously over valued, or the market has just declined a bunch, and what does that have to do with the current market value now. It may have been whatever before, but the point for the client is what is it worth now.
 

JENIFFERW

Member
Joined
Nov 26, 2007
Professional Status
Licensed Appraiser
State
California
But if it's any consulation, it sounds like they could have got closer to what you said if it sold in a week. They should have listened to you:)
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
I appraised a two family a few months ago. It needed mostly cosmetic work and was across the street from a nice park. I appraised it for $398K. It went on the market after my appraisal for $299K and sold for $300K in less than a week. The Trustee Deed Transfer from the prior foreclosure had a transaction amount of $405K.

Is something rotten here?

Maybe, maybe not.

I'm looking at an REO house right now that I'm considering purchasing (for my mom and aunt). It is listed in the high $400ks and is listed as a REO (recently updated and remodeled kitchen, looks good in the MLS virtual tour). I'm thinking about making a significantly low offer and, if they accept, I can close as quickly as they want.

Nothing rotten about that transaction (if it occurs).

The house sold in 2005 in the mid $600's. The foreclosure deed of 4-months ago shows a transaction amount in the low- to mid-$500's.
It's 2002 sale price was $415k. I think values are going back to the 2002 levels and will attempt to persuade the owner that is the case in my offer. :new_smile-l:

(And, just in case anyone wonders: No, I have not previously appraised this property)
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Maybe, maybe not.

I'm looking at an REO house right now that I'm considering purchasing (for my mom and aunt). It is listed in the high $400ks and is listed as a REO (recently updated and remodeled kitchen, looks good in the MLS virtual tour). I'm thinking about making a significantly low offer and, if they accept, I can close as quickly as they want.

Nothing rotten about that transaction (if it occurs).

The house sold in 2005 in the mid $600's. The foreclosure deed of 4-months ago shows a transaction amount in the low- to mid-$500's.
It's 2002 sale price was $415k. I think values are going back to the 2002 levels and will attempt to persuade the owner that is the case in my offer. :new_smile-l:

(And, just in case anyone wonders: No, I have not previously appraised this property)

Have you at least gone & looked at it? The Vitual tour MAY have been done piror to foreclosure. Copper Wire is selling high. & many builders have NO problem putting "Upgraded" second hand cabintry & other things in a new home.
 
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