Comments on: Real, Real Estate Reform Needed https://appraisersblogs.com/real-estate-reform-system-make-over-needed Appraisal News and Tips for Real Estate Appraisers Fri, 14 Sep 2018 06:02:50 +0000 hourly 1 https://wordpress.org/?v=7.0 By: clint https://appraisersblogs.com/real-estate-reform-system-make-over-needed/#comment-13795 Wed, 13 Apr 2016 05:56:24 +0000 http://appraisersblogs.com/?p=11648#comment-13795 Here’s a scenario for you. My subject was 672 square feet listed for 200,000. There are two competing listings in the neighborhood, each around 1000 square feet with accepted offers, listed at 189,000 and 194,900 in similar condition. There were 2 sales in the neighborhood also in inferior condition, sold in July and June, an 896 square foot for 170,000 and a 672 square foot for 160,000. Then there was a recent sale closed in March 2016 in a nearby competitive neighborhood for 215,000 with 896 square feet. There is a contract on the subject for 200,000. The contract price per square foot is not bracketed by any sales or listings, its too small of a home, but according to the listing agent there were multiple offers. This market is Showing an 8% increase in values over the past year because of low inventories and low interest rates. Since there are no sales or active listings that bracket the price per square foot, most Appraisers will conclude that the value is below the contract price. Even, after making adjustments for time of sale and condition, the buyer is still paying more than is logically supported on a price per square foot basis. In this scenario, I concluded the opinion of value would be no greater than 194,900 based upon the principle of Substitution. So you have to wonder who is deciding what this property should be selling for, the Realtor or the market? It seems the market chooses without making educated decisions. How else can you explain why anyone would pay more for a 672 square foot home than a 1000 square foot home on an identical site with equal utility and amenities? In general, buyers do research before they buy something. From the purchase of a camera to the purchase of a car, they do research before they buy. Then when it comes to buying a house, they put their trust in the Realtor, without doing any research themselves, or relying on garbage like Zillow or some other websites with no verification of data. Then when the appraisal comes in under contract they complain to their lender. Then the lender gets an earful from the Realtor who put the deal together. Then the Realtor contacts the Appraiser and gives the Appraiser a handful of sales to consider. Then the Appraiser looks up the sales, and has to explain why each one is garbage and was selected based upon the selling price; not the salient features. So now all that time of the appraiser’s is wasted without any additional pay for his/her expertise in the matter. And after it is all done, there is no Thank you from the lender for saving us money on a bad deal, instead, they might stop sending orders. It is still a flawed system.

]]> By: KenQ https://appraisersblogs.com/real-estate-reform-system-make-over-needed/#comment-13783 Mon, 11 Apr 2016 16:02:49 +0000 http://appraisersblogs.com/?p=11648#comment-13783 Great minds think alike. Great article Hamp!

]]> By: Leanne Kerber on Facebook https://appraisersblogs.com/real-estate-reform-system-make-over-needed/#comment-13776 Thu, 07 Apr 2016 23:32:32 +0000 http://appraisersblogs.com/?p=11648#comment-13776 Amen!

]]> By: Retired Appraiser https://appraisersblogs.com/real-estate-reform-system-make-over-needed/#comment-13775 Thu, 07 Apr 2016 21:38:16 +0000 http://appraisersblogs.com/?p=11648#comment-13775 Hamp,

I value every article that you’ve ever written on appraising since 2009 because you are dead on every single time. The current state of the “profession” can be described in one word: PATHETIC

]]> By: bill johnson https://appraisersblogs.com/real-estate-reform-system-make-over-needed/#comment-13773 Thu, 07 Apr 2016 15:13:06 +0000 http://appraisersblogs.com/?p=11648#comment-13773 To take this a step further Mr. Thomas, why does our client the lender give power to others who are not the intended user of the appraisal the ability to appeal our reports / value? Why are the owners, borrowers, buyers agent, listing agent, the loan officer, etc., given the power to in essence force the appraiser to be the educator of all at the cost of hours of our time (reconsideration of value) for NO PAY? How can the Better Business Bureau establish the borrower as our customer and give them the ability to freely post negative comments for the public to view when they are clearly not our customer and NOT OUR CLIENT. We at times seem to have the most power for the least pay while our clients offer little to no protection for us.

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