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Venting!!! Realtors & $/SF thing - again!

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Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
We have maybe the largest state wide Real Estate Office here that has been using some quacky AVM type thing called "The Real Estate Report Card". Now I know where they've been coming up with the $/SF idea and thinking it's so important.
:twisted: :twisted: :twisted: :twisted: :twisted:

Anyway, I couldn't possibly make the purchase/sale contract price of $310,000 and came in at $282,000. I spent many hours searching the tax records and MLS, street by street - some more than twice - just to make absolutely sure I didn't miss something that would actually justify the contract price. Fact is, there is nothing to justify it!!!! Now, I know I'm not perfect so I offered to the LO to consider additional sales if the Realtors involved could find something newer, nearer, as similar as the comps I've already used. So:

Listing Realtor has so far:

Insinuated more than a few times now that I don't know anything about real estate prices.

Indicated that if I don't change my value to the contract price the lender probably won't give me any more orders.

She talked to another appraiser that said he could make that value and she knows I wouldn't like to have that happen as it would be embarrassing for me.

She gave me 5 addresses she said I should have used.

She states over and over again that the $/SF is the main pricing factor and simply cannot understand why I don't get it since I'm 'supposed' to be an appraiser.

THEN, she faxes me this 'Real Estate Report Card' thing with 25+/- sales on it with sale dates from Oct 2002 - Jan 2002.
The sale prices range from $153,000 - $925,000 / Average is $334,652
$/SF from $91 - $248 / Average is $145/SF

THIS IS WHAT SHE BASED HER LISTING PRICE ON AND WHAT SHE IS USING TO SHOW TO THE SELLERS AND BUYERS TO "PROVE" THE VALUE OF THE PROPERTY!!!!!!

Some big time IDIOT at this real estate office apparently has most (if not all) their agents using this crap!

BTW, my comps are two sales end of Dec, 02 and one Jan 03, with an active listing as a 4th. I have over a dozen recent solds and about 5 active listings to completely justify my value with 3 within .5 mile and 1 at .8 mile.

And... when she called me this afternoon to say she is faxing this list to me, she proudly states that all on it are within 3 miles! She can't seem to talk about a real sale price anymore as the $/SF is now the only factor of any importance.

So..... here is the email I sent to her with a cc to the LO. (LO is experienced and a good one). Sh*t will likely hit the fan again tomorrow. I added the underlines and bold. Names and addresses are changed to protect the guilty.

Click on this link: http://www.inman.com/InmanNews.asp?ID=34317

"The Appraisal Institute worked closely with Rep. Jan Schakowsky's (D-Ill.) office to modify language found in her soon-to-be-reintroduced bill, the "Save Our Homes Act." The bill would make it illegal for lenders, brokers or real estate agents to coerce or intimidate appraisers with respect to the value of the home they are appraising."

Ms Realtor,

The comparable sales I used are all newer than ones on the list you sent to me via fax today. There is nothing on the list you sent that I would consider a superior comparable sale than any of the ones that are in my Appraisal Report.

Regarding the sales you verbally gave me yesterday:

1) 1234 Nice Residential Dr.: sale date 3/30/01 - not only over 6 months, not only over 1 year, it's almost 2 years old.

2) 5678 Equal St.: sale date 7/25/01 - not only over 6 months, not only over 1 year, it's over 1 1/2 years. Plus, it's a 2 story.

3) 9102 Similar Ave.: This is an Active Listing - not a comparable sale.

4) 3456 Similar Ave.: This is an Active Listing - not a comparable sale. Plus, it has a guest house! Even if it was sold and closed, it is not a comparable sale for the subject property.

5) 7890 Alotalike Ln.: This is an Active Listing - not a comparable sale.

Appraiser's have laws and rules that we must abide by to do our job legally. If you would like copies of the laws and rules, Federal, State and Fannie Mae, Freddie Mac, FHA, etc., please let me know and I will send some to you. I also would be happy to come in to your office to talk about the role of the Appraiser and the laws/rules we work under.

Market Value for an Appraisal is not whatever is on a purchase/sale contract. The following is directly from the Appraisal Form that all lenders must have included with all Appraisals. All Appraiser's sign that they have completed the Appraisal according to this definition of market value when it's for a lender.

DEFINITION OF MARKET VALUE:

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.

Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale.

*Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustment can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market’s reaction to the financing or concessions based on the appraiser’s judgement.

(From Fannie Mae Form 1004B 6-93 Appraisal Form)


Pamela E. Crowley, St. Cert. Res. REA RD3158

I was too tired to continue. :roll:
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Pam, the only thing I would have done differently and somehow suspect that you did was to have cut and pasted a few specific Fannie quotes as in the 'rooles' for filling out the 1004 FANNIE Form... "please see bottom lower right of the appraisal form as to who developed it and by whose ageis we are SUPPOSED to fill it out, when it is for use by that entity?!?!?" Do ya SEE it?!?!? Ms. Realtor who thinks she knows all???

(BTW I may cut n past some sections of YOUR rant as methinks I have one coming up on the morrow... :(
Because the refi borrowers... paid just a little more two years ago than I appraised it for today, AND the paper said that values in the city as a whole have increased 9 PERCENT last year ! So OBVIOUSLY their home is supposed to come in at the dream $$ that they 'need to make their deal work'... and besides a REALTOR friend just did a BPO for them and she says it is worth 'what they paid plus 9% each year since!!! (I KNOW you saw this one coming) :evil: :evil:

The excrement will hit the high velocity rotating blade in the morning...

Did I mention the other area closed and listings? YES I freaking considered them...NO it made no never mind because the home wasn't 'worth' what they paid for it even though they HAD TO PAY MORE THAN LIST PRICE TO GET IT FROM SOME OTHER COUPLE THT WANTED IT TOO... the repetative dull thud is not the fan turning, it is my head hitting the door frame...

Only proving that there are more than one set of fools in the world, right :?

I am going to hide under a rock.

Could I be wrong? COULD this house that I think isn't 'worth it' really be worth MORE? Had I not been inside oneof the comps and had good interviews with agents on the other two (top value for area DUH) I would be quaking in my boots... but so far it looks to me like I have not only blown a deal ,but wil make many people very not happy. such is life in the big city where there are REAL comps sufficienet to prove MY point and unsupportive of theirs.

think they'll listen? :?

naaah.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
You are far too kind...I would have suggested she go back to her bowl of kibbles n bits!
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Just received a thing called an order from one of your lovely Florida lenders (Consumer Credit Services - Jacksonville) and I quote.

"Need appraisal at $210,000"

"Also need lookups for 2630 Bo Diddly and 922 Elvis"


I faxed back.....This violates USPAP and could cost me my license, so I don't think so!

The subject might appraise at $160,000. Where do these but' come from???????

 

terr

Freshman Member
Joined
Jan 29, 2002
Professional Status
Certified Residential Appraiser
State
Wisconsin
I do not know what the value of your appraised value is. The one thing I do know however, is that we will never be out of the value pressure cooker until Lenders quit paying commisions to loan originators and pay a fair salary to them and that brokers are not paid by commission but by a fair salary on a pay for performane basis.

The Lo's and brokers both want the highest values humanly possible and inhumanly possible for every deal because they make more money by higher values and greed still runs rampant as it has for the last 1 million years and will probably never end at least in our life times.
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Pamela,

Hang in there.....You've just hit on my pet peeve.....realtors are salespeople. They are driven by their commission. Ask a realtor for comaprables and you get sale prices. You are the lone person representing the buyer. You are the ONLY person representing the buyer. I'll bet the buyer's realtor is not even representing the buyer!

Here's one of my stories.

A 4-plex under contract for $300,000. The 4-plex next door (Exactly like the subject and built by the same contractor) is pending for $300,000 but sold 2 months ago for $225,000. Same realtor that sold it now has it listed for $75,000 more. Called the realtor, nothing unusual about the $225,000 sale. Realtor VERY close-mouthed about it. As you might have guessed, it's my "comp #1" (At $225,000)

My 4-plex has a realtor that insists that it's worth $300,000 because the one next door is pending for $300,000. (can you say collusion?)

Needless to say my value is quite a bit below the $300,000 sale price.

Pamela, I have been hammered for over 1 month now to change the value on my report. (no better comps have crossed my FAX machine) I am refusing to do so. Just got a call from the realtor today telling me there's another 4-plex close by that is a pending sale and the appraiser told him that it would appraise for $285,000. I told the realtor that it is a violation of USPAP for an appraiser to give a value without completing an appraisal. And until it closes, it's not a "comp."

What I think I've waded into is a couple of realtors in collusion with one another to falsely inflate sale prices although I can't prove it. They are looking for an "good old boy" appraiser to "bless" their transactions.

Like the song says......."It ain't me babe"
 

Atlanta CG

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
Next time ask the Mercedes/Lexus/Cadillac driver agent when she/he puts her car up for sale, does she take the average sales price of ALL cars sold the previous month and divide by the number of autos to arrive at a "fair market value" for her fancy-A**" car?
 

Wally Jones

Senior Member
Joined
Jan 23, 2002
Professional Status
Certified Residential Appraiser
State
Florida
Pamela,

Hang in there. You know you're right.

I received one of those "report card" thingies last year and it was pretty revealing. To think lenders are making decisions based upon what I saw is scary. One of the things I discovered was that in each case the square footage they used was the "gross building area" rather than the gross living area. Made a big difference in there price per square foot figures.

If you recieve any more threats, veiled or otherwise, from that excuse for a real estate person, I'm sure you know the addresses to send letters to!
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Thanks gang! It ain't over yet and I could turn nasty today along with the weather (thunderstorms).

Mike G: Regarding Consumer Credit Services - Jacksonville, yup, I've heard from those jerks at least a dozen times in the past few weeks, I think they finally got the idea that I won't play ball by their rules cause they haven't called in about a week now. Comp checks and predetermined value wanted every time and they can no longer claim ignorance since I've 'educated' them every time they called. This city is literally crawling with real estate fraud.

Bruce (Blue1): Actually, the selling agent is a good one that does understand Appraising, has been in the biz for 25+/- years, read my report, understands it, agrees with it, and will provide a copy of the second report to me if/when it happens. She also told the selling agent that it wouldn't be wise to mess with me about it with NO comps that are better than what I used. She told me that the market here is softening and that the stats that FAR/NAR are putting out for the media are making her job harder. She actually appears to be a honest, ethical, knowledgable and realistic professional Realtor. So, I'm only getting blasted from one side instead of both this time. She knows and acknowledges that there are at least 4 active competitive listings that are in my appraised value range. Told me the buyer thinks I'm wonderful. I haven't heard that in a very, very long time.

I'm going to write an article for our local Board of Realtors magazine regarding the way $/SF can skew pricing. Any help on that endeavour would be very appreciated!
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Pamela, I will use this the next time A realtor trys to brow beat me. I also will file an ethics complaint, since I am a Realtor. These two actions should be able to get the Realtors license jerked forever!

Got to love North Carolina: Great golf, great weather, great people!


Part I. General Laws of Banks, Savings and Loan Associations and Savings Banks.
Chapter 53. Banks.
ARTICLE 19A. Mortgage Lending Act.
§ 53-243.11. (Effective July 1, 2002) Prohibited activities.
In addition to the activities prohibited under other provisions of this Article, it shall be unlawful for any person in the course of any mortgage loan transaction:

(11) To influence or attempt to influence through coercion, extortion, or bribery, the development, reporting, result, or review of a real estate appraisal sought in connection with a mortgage loan. ..."


"I would rather have a German division in front of me than a French
one behind me."

--- General George S. Patton
 
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