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To: podkane
Nice places that are "reasonably" priced (250-300K), move very quickly. Lesser places that have been "bubble"-priced sit for months, then have their prices reduced. According to one real estate agent I know, the banks are beginning to turn down loan applications because these houses aren't appraising highly enough.

Ho, ho, ho!! The appraiser has a copy of the sales contract in front of him. So he knows the number he's supposed to come up with. The instructions are to find "similar" properties, yes, but the system invites selection bias. Since the appraiser has the sales contract in front of him, he's going to choose properties near that price.

Usually if the property doesn't appraise, it's because the appraiser sees that the buyer is trying to buy something at the bottom of his range; he can't allow that, so the property won't appraise. Then the buyer really wants to buy he can either come up with a larger down payment or make capital improvements to the property. Either way, the buyer will be at the top of his range by the time the sale actually goes through.

13 posted on 08/12/2005 5:17:26 PM PDT by scrabblehack
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To: scrabblehack; podkane; durasell
Lotta big talk...but no substance.

My brother's firm tells banks each and every day that certain properties don't hit their numbers and that the buyer ought to reconsider or make a lower bid.

If he and his firm didn't behave with integrity, their client base would disappear. And their client base includes all the responsible banks that lend in the southeast.

15 posted on 08/12/2005 5:23:02 PM PDT by Dark Skies (The storm is coming!)
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