I have had my own bad experiences (3) with Appraisal and I am so glad that it came to light that NAR finally is acting on this sorethumb issues.
One of the property was under $20K the purchase value, fortunately it was a standard sale and the buyer came up with his own $20K to make up for the downpayment and the transaction closed on time.
We are working with another LOW-BALL appraiser on one short sale property. The bank was ready to approve on it until the Lender's appraiser appraised it $3K less than the price on the purchase offer. GEEEEEEEEE!!!
Another property was also a short sale and it was appraised by an out-of-the-area appraiser (San Diego). The property was in Romoland (Sun City). It is in the midst of short-sale and REO properties which were sold around $180K. I had it on the market for $225K, had an offer for $210K.
The appraiser appraised it for the bank for $230K. The bank (Email me for the name) REJECTED the Shortsale approval request and told me to get another offer within 30 days. There is no way that I could get anyone else to submit an offer for even $211K.
30 days later the bank FORECLOSED on the property and sold it to another bank for $230K.
Guess what!! NOW THAT BANK PUT THE REO PROPERTY on the market at $165,000 and it is sold with 13 days for $169K. GO FIGURE why we have so many FORECLOSURE and REOs on the market.
Here are links to several appraisal issue, QUOTED FROM SEVERAL SOURCES:
Voices of Real Estate
All is not quiet on the Midwestern front, Posted by Steve Brown :
Here in the trenches, on the front lines of real estate in Ohio, we continue to face challenges:
First, there is an oversupply of houses, and home values are still in a general decline.
Second, although the average sale price is up, we have unprecedented marketing times and nervous appraisers (or at best very conservative appraisers). With sales nearly 20 percent below the previous year, many appraisers working on behalf of banks are brought in from out of town appraisal companies. They are only familiar with the market through Internet information. As a result, we have appraisals coming in as much as $100,000 below contract sales price – effectively killing the sale.
Appraisal issue coming to a head
NAR calls for suspension of rules governing Fannie, Freddie loans
By Matt Carter, Friday, June 26, 2009.
NEXT SHALL WE WANT TO TALK ABOUT THE BANK? oh no, I am getting in trouble now........