 What if the banks appraisal is less than my offer? What happens then? |
Is there a contingency we should have made regarding this issue? Or is it standard to renegotiate or just with draw?
Additional Details
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 What is 10 % of $69,550? |
what is 10% of 69,550
Additional Details
1 i came up with 6,995 but i wanted to make sure it wasnt just me cause i dont think that this house is worth putting that much down own thats ... |
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 Can an apartment manger ask me to leave if I have lived there for 6 months for a crime that I committed 4 ago? |
Additional Details
I plead no contest to a drug charge almost 5 years ago. Well they asked on the app. have you ever been convicted of a drug offense. Well I wasn't I pead no ... |
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My girlfriend and her family got kicked out there apartment by not paying rent what can they do to move back in?
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 Judgement? |
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 Why haven't we received a closing date? |
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 Can I maintain the rights to the cell tower lease I have but sell the land under it? |
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gary.aldras | Are distressed sales factored into the appraisal of a residence? |
An acquaintance tried to refinance but couldn't because the appraisal of the residence came in too low. A factor was two houses (next door and across the street) were distressed sales, meaning they were foreclosed and sold at auction well below the price the other houses in the market were selling. I am talking about 30% lower. In one of the cases, the owner of the house rented to a group of young men who were making amateur porn and fight videos inside the house, and they totally trashed it. They eventually walked away without paying rent, leaving the owner holding the bag, who also just walked away. In the other case, a couple divorced, and neither could manage the payments on an ARM, and there the Bank also foreclosed.
Is it standard practice within the appraisal industry to factor in these distressed sales when determining values? |
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Expert Realtor
 |
No. An appraiser is not supposed to use the lowest price nor the highest price comparable when conducting an appraisal. He is also not supposed to use foreclosures...however, there is a catch.
We have neighborhoods in my area that have a 61% foreclosure rate (yes, 61%).
An appraiser, in that case, would not have a choice, because the appraisal needs to reflect the overall lowering of market value in the neighborhood.
A good appraiser, when they see something odd, will start doing research to find out why the value was so low. I have got tons of calls over the years for properties that I have undersold, to find out why.
When I underwrote loans, I routinely sent appraisals back to the appraiser to be corrected if foreclosures were used for comps. I conditioned for the appraiser to find me comps that were not foreclosures or give me a reason why they had to be used.
Lenders do not require more than 3 comps for investor requirements.
So, STANDARD practice says no....but in some circumstances, he has no choice. |
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Landlord
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He has to include all sales in the comp. Those two houses lowered the value for the neighborhood, just like any other sale can lower or raise the value of homes surrounding it. This is the main reason people hate renters in their neighborhood, the odds of them lowering the value are high.
This is happening all over, not just to your friend. |
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no_mo_names
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Generally, that is not an acceptable practice. UNLESS the current market trend in the area is predominatly foreclosures or distress sales.
Sure the public records database only shows the square footage, room count, etc. However, appraisers need to verify the information on the public records.
Usually, they should cross reference the sale with the MLS or with an agent. Public records are way off lot of the times since they are old data and may or may not have been updated recently.
If these two homes are the only ones that sold in the area that is similar to your friend's home, then Yes. Otherwise, they should not be considered if there are valid comparables that are part of an arm's length transaction.
My advice to you: Get another appraisal with an appraiser that uses verifiable data.
Good luck |
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acermill
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Yes, it is, since any appraisal database does not include reference to the condition of the house when sold. Those databases only indicate footage, number of bedrooms, bathrooms, and so on. |
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Desperate for help!
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yes totally |
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Freeport77541
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of course.. you can not just pick the highest ones and ignore the lowest, it comparisons across the board for same type property in that area. At least that is how it is suppose to work.... |
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DeeDee
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they use comparables in the same neighborhood to compute the value of other similar property. Unfortunately they used the two you mentioned. The appraiser wouldn't have know the situation, only the sales price. |
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jeanniep
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yes |
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Marysue
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A comp is a comp.
If your friend’s house was for sale, a buyer’s agent would use the sale from down the street to help support a lower offer from their client. That’s what the bank cares about, if your friend wanted to sell the home, the bank would want him to sell for at least as much (minus expenses) as he owes; on that note, if he defaulted, the bank wants to know they can recoup the amount of the loan (or as much as possible). |
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kelly
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Yes it factors hugely, what ever the homes in the area with the same compts that the friends house has will factor there vaule of there house, so if the houses all around her are beinging sold for a cheaper price then her home will be pulled down as well. |
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