V. Nightshade
Junior Member
- Joined
- Nov 17, 2003
- Professional Status
- Certified Residential Appraiser
- State
- California
I've been doing a number of REO appraisals for the purpose of asset valuation. I like to look up what the eventual sale price -- or lack of sale -- is on the properties I appraise to see how I'm doing. I've noticed that in most cases (not all) the eventual sale price is about 15% lower than my appraised value. There are also some properties (dumps without redeeming characteristics) that are still on the market. Is this normal, since prices are dropping? Or do I need to reconsider how I am doing the appraisal and perhaps the reconciliation. (In other words, am I doing something wrong?)
Another related point: When appraising an REO for asset valuation purposes, if the property needs a giant cleanup prior to being FHA-marketable, I have adjusted for this in the Repair Addendum but not as an across the board cost to cure in the actual report. I do adjust for its condition, however, with comps that appear to be similarly-conditioned REOs. However, in the real world, we know that before the house is placed for sale, there IS some kind of cleanup. How does that figure into things? Should I be doing a cost to cure for cleaning up the dump? If so then putting that in the repair addendum seems redundant.
Another related point: When appraising an REO for asset valuation purposes, if the property needs a giant cleanup prior to being FHA-marketable, I have adjusted for this in the Repair Addendum but not as an across the board cost to cure in the actual report. I do adjust for its condition, however, with comps that appear to be similarly-conditioned REOs. However, in the real world, we know that before the house is placed for sale, there IS some kind of cleanup. How does that figure into things? Should I be doing a cost to cure for cleaning up the dump? If so then putting that in the repair addendum seems redundant.