What Do Appraisers Consider In Determining Value?

[Restrain]

First, go talk to Texas Lending or other solid brokerage companies. They can provide a much wider range of products. Not hyping them, but CW has its specific products. TL, CTX, etc can have a much wider range of products.

Second, definitely look at FHA.

Third, be sure that when an appraiser looks at the home, the appraiser is looking at a rebuild of the subject. You definitely do not want an appraisal done as a drive-by.

My wife is a fee appraiser in the Metroplex and she sees the problems with getting a vailid estimate of value every day. REOs, etc tweak AVMs, real estate agent CMAs and other automated valuation systems significantly. So, be sure that when you talk with your lender, be sure that they truly understand what you have vs. the other homes in your neighborhood.

 

[Mztk1]

Will an appraiser look at the subdivisions near my home (within a 5-10 block radius) to find homes that are of similar size and upgrade?

Only if they need to. If you have recent sales in your subdivision that bracket your overall appeal, then no. But if the sales are too dated, or they are inferior to your house while at the same time your house is not an overimprovement for your neighborhood, then yes, they'd have to.

Although foreclosures are not comparable sales, how do they affect a valuation if the subdivision's most recent sales are primarily foreclosures?

Foreclosured CAN be comparable sales. In some markets, where conditions are so bad, the only people who are selling are owners who have to sell. That means they are in the same position as the bank who has to sell and they become part of the same market. Generally, when I see a market where over the past 3 or 4 months nothing has sold but the foreclosures and short sales, even though there are regular listings available, it is an indication that the market is unwilling to pay more for regular listings and the foreclosure / short sales are the market. There is no doubt that they will drag the values down. Sometimes more so than others.

Would I possibly lower the appraisal amount by protesting my property value for tax purposes, or telling my insurance company that I am now overinsured based on property values?

No. The appraisal for lending purposes, the appraisal for tax purposes and the appraisal for insurance are three different processes that do not cross over one another.

I am a LandSafe Premier appraiser (Countrywide owns LandSafe) and though I can't speak for everyone who appraises for them I do not know that Countrywide wants no less than 2 sales that sold through the MLS as resales which closed within 90 days, they also want at least one, preferrably all, sale to be from the subject neighborhood. Listings and pendings must also be analyzed and the two most competiitve listings or pending sales should be used as comps #4 and #5. Any sale on the street that is not used should be disclosed and discussed as to why it wasn't used. They are looking for a real market value and if it is not supported there is a good chance their review system will catch it.

 

[Michigander]

Condition and upgrades are a factor. Since your house was rebuilt a few years ago it should not be compared to houses that need work without a market based adjustment. I would be apoplectic as a homeowner if my house with (say) 50K worth of upgrades was compared to a foreclosure sale in need of a bunch of work without some adjustment. Just don't expect it to be dollar for dollar, as it should be derived from the market.

Other than that, of course the sales that should be used would be the most similar, recent and proximate sales.

Do talk to your lender. CW has programs to help borrowers out, in particular if they are not in arrears with their mortgage payments.

 

[abbazwoman]

Serena,

A CW rep told me that I had to hold back on one mortgage payment before they would consider a loan mod. Do you have a specific name and phone number of someone who is familiar with the programs you reference? I am not wanting to damage my credit, I'd just like to look at possibly dropping my rate by a couple of points.