.

[Urbandale2013]

And there in lies the problem. Appraisers have to come back inflated values to justify the current market sale price for the back to issue the mortgage.

It reminds me of the "ratings" the agencies put on securitized tranches in the 08 mortgage bubble. No real basis. Just doing it so they can all collect their fees and move on

Appraisals are a joke but I’m not sure which reason you are talking about because frankly I think it’s the opposite reason as you. I bought my house a couple of years ago and had no issues getting it appraised because it was what houses were going for. I refinanced and they came in 3% lower than the original appraisal. In reality the price has probably gone up around 10% all within a couple of years. The real problem is there is no accountability for them.

 

[BCClone]

I agree on 20% down. But I believe it's at least 25% of Americans don't have $1000 saved for an emergency...

Another thing not many people talk about is that older generations have A TON of their net worth tied up in equity in their homes. That is their nest egg. They are also the most active voters. So it's beneficial to keep the system prompted up.

How you fix this is by making multi unit and higher density housing easier to build and more zoning friendly. While making single family housing as expensive as possible. We need more housing in the US. Fastest, most cost effective and best for our planet is to go up and not out with that housing. But the American dream is a cul-da-sac on a half acre lot in Waukee. Not a duplex in Windor Heights or a 4 story condo in Beaverdale

If you required 20% down on houses with limited exceptions (those being few and far between), you would push rentals heavily. I have even seen house loans with 1% down, believe that was VA or such.

People want more space when they have kids. Allow them to play outside and not have to walk to the park with them to play catch or such.

 

[BCClone]

Appraisals are a joke but I’m not sure which reason you are talking about because frankly I think it’s the opposite reason as you. I bought my house a couple of years ago and had no issues getting it appraised because it was what houses were going for. I refinanced and they came in 3% lower than the original appraisal. In reality the price has probably gone up around 10% all within a couple of years. The real problem is there is no accountability for them.

There is accountability, I know a handful of former appraisers due to licenses being yanked. Most of them was when the appraisal was light in the purchasers eyes and they didn’t have enough downpayment then. They turned the appraiser in to retaliate against them “losing” “their” home. Since two other appraisers came in just high enough, the other appraiser was punished. See a little incentive now for the appraiser to come in high enough for the loan?

 

[Urbandale2013]

There is accountability, I know a handful of former appraisers due to licenses being yanked. Most of them was when the appraisal was light in the purchasers eyes and they didn’t have enough downpayment then. They turned the appraiser in to retaliate against them “losing” “their” home. Since two other appraisers came in just high enough, the other appraiser was punished. See a little incentive now for the appraiser to come in high enough for the loan?

They wouldn’t even let me file a complaint. I tried to fight it but they just said tough ****.

The reality is an appraisers job is to tell what the property is worth. If people are willing to pay it then that’s the number they should come in with. Home prices keep going up because there is more demand than supply. You can argue that they are inflated due to monetary policy but that’s what people are willing to pay.

If I have 5 people willing to pay $1,000 for my Iowa game ticketsand you come in saying they are only worth $500 then you are just wrong. People are willing to pay $1,000 so they are worth that.

 

[BCClone]

They wouldn’t even let me file a complaint. I tried to fight it but they just said tough ****.

The reality is an appraisers job is to tell what the property is worth. If people are willing to pay it then that’s the number they should come in with. Home prices keep going up because there is more demand than supply. You can argue that they are inflated due to monetary policy but that’s what people are willing to pay.

If I have 5 people willing to pay $1,000 for my Iowa game ticketsand you come in saying they are only worth $500 then you are just wrong. People are willing to pay $1,000 so they are worth that.

So if I offer 10% more than asking (because I am changing jobs and need a house NOW) and 3 other people offer asking, the house is worth 10% over ask. So the 3 who offered, the seller, and the Realtor were all wrong and only I at 10% over is correct? You are making the point that there should be no appraisals and lenders should give you 80-95% of what ever you offered to pay. That seems like a mess waiting to happen.


I can ding a buddy who offers me 50% over true value, defaults on it and I can step in a year later and repurchase it for 2/3rds of what is owed possibly. Easy to game that system.

BTW, what did the other appraisers say your house were worth when you filed the complaint?

 

[BCClone]

They wouldn’t even let me file a complaint. I tried to fight it but they just said tough ****.

The reality is an appraisers job is to tell what the property is worth. If people are willing to pay it then that’s the number they should come in with. Home prices keep going up because there is more demand than supply. You can argue that they are inflated due to monetary policy but that’s what people are willing to pay.

If I have 5 people willing to pay $1,000 for my Iowa game ticketsand you come in saying they are only worth $500 then you are just wrong. People are willing to pay $1,000 so they are worth that.

If you couldn’t tell, I appraised houses in the past. Would you like to keep calling my knowledge dumb compared to yours?

 

[Urbandale2013]

So if I offer 10% more than asking (because I am changing jobs and need a house NOW) and 3 other people offer asking, the house is worth 10% over ask. So the 3 who offered, the seller, and the Realtor were all wrong and only I at 10% over is correct? You are making the point that there should be no appraisals and lenders should give you 80-95% of what ever you offered to pay. That seems like a mess waiting to happen.


I can ding a buddy who offers me 50% over true value, defaults on it and I can step in a year later and repurchase it for 2/3rds of what is owed possibly. Easy to game that system.

BTW, what did the other appraisers say your house were worth when you filed the complaint?

Yeah that is no where near what I said. I said if you have multiple people offering an amount and the appraiser comes in lower than that they don’t know what they are doing.

The bank said they couldn’t do anything about it and I just had to accept it. They said there was no complaint process.

 

[BCClone]

Yeah that is no where near what I said. I said if you have multiple people offering an amount and the appraiser comes in lower than that they don’t know what they are doing.

The bank said they couldn’t do anything about it and I just had to accept it. They said there was no complaint process.

Your bank was wrong. Easiest is to spend 300-400 and get a second appraisal. If you a good relationship with your bank, they could ask the appraiser to re-examine. Like i mentioned 2-3% ranges are very common. I’ve seen hot comps that are the best available inflate values and 2 years later, sellers that needed out pushed the market down for similar houses.

 

[Gunnerclone]

Appraisals come in low in CBus all of the time. That’s why buyers offer gap coverage in their offers.

 

[Urbandale2013]

Your bank was wrong. Easiest is to spend 300-400 and get a second appraisal. If you a good relationship with your bank, they could ask the appraiser to re-examine. Like i mentioned 2-3% ranges are very common. I’ve seen hot comps that are the best available inflate values and 2 years later, sellers that needed out pushed the market down for similar houses.

I’m looking to get it reappraised soon to get PMI taken off. Based on recent sales I should be over 20% but the current appraisal is only at like 14%. I just don’t want to pay for one and be at like 81% or something stupid. Part of the problem is it is a townhome and mine is a more expensive variant and he tried to treat it equivalent to the cheaper variants.

 

[Beernuts]

We put a 15k gap in ours. It seems strange to me that multiple offers could come in at X and the appraisal says it's not worth X.

I think appraisers are required to use comparable sales that have closed. Thus sometimes their appraisals are behind the recent movement of the market. It is a difficult job as they are balancing the uniqueness of each property with market conditions and banker / borrower expectations.

You think houses are hard..try appraising farmland right now. Values are exploding to higher levels each week.

 

[BoxsterCy]

It's crazy here in Twin Cities. I am first burb west of downtown Mpls. Neighbor gal listed her small single car tuck under house (40 foot lot) for $425K. It's appraised by county for taxes at $289K. Her listing price gave me a doubletake. Talked to her and she said, what the heck I'll see if I can get it. Sold for over list in five days.

 

[cytor]

For everyone buying houses right now...

We're looking in the Twin Cities and we drove up there every weekend for six weekends looking at houses.

After 50+ showings and six rejected offers, we scored a house for 2.9% over asking. Most houses we lost out on went for 6-10% over asking. The worst was a $485k listing that went for $565k. That's 16.5% over listing.

Anyway, I think we lucked into this house because of the letter we wrote to the sellers. We saw them at our home inspection yesterday and they told us they had a better monetary offer but chose ours because of our letter to them. I thought it was cheesy but it seriously worked. Will it work in a 45 year old couple? Meh? But an 80+ year old couple. Absolutely.

If you're searching, keep your head up.

Oh, and our first item for the home will be the Iowa State flag and flag pole.

Welcome to the Twin Cities. We will always be glad to see more ISU gear around here!

A couple things to prepare for:

1) The summer temps start later and they end sooner. Sept is like a switch from summer to fall.
2) State income taxes are a lot higher here. IIRC, 6th in the country?
3) Hok fans are just as dumb and arrogant here as they are elsewhere.

 

[BoxsterCy]

Hmmm, should ask the OP what kind of car they drive. Edina has some standards with respect to this.

 

[BCClone]

I’m looking to get it reappraised soon to get PMI taken off. Based on recent sales I should be over 20% but the current appraisal is only at like 14%. I just don’t want to pay for one and be at like 81% or something stupid. Part of the problem is it is a townhome and mine is a more expensive variant and he tried to treat it equivalent to the cheaper variants.

Did the bank give you a copy? Best to have it as a starting point. Sales are supposed to be in the market district and 3 need to be less than 1 year old. Those take precident over all others. He is, should be, using MLS or prior appraisals, for interior condition and specs. Assessor data can be way off. Good realtors measure rooms, seen too many assessors estimate. Assessor room counts are usually off. Baths can really be different.

With the 1%, that is why I wish it was a range. Honestly, you may be willing to pay 210 for a house because you need to move, whereas I may only think it’s worth 195 but have a one year timeline. If Interest rates go up 1% in 6 months and it may only be worth 190, but due to the sales comps, it may be valued at 210 for when you bought. It can also come down to rounding. Most will use 70 or 75 per square foot for GLA, not 72.50. If I use one, you may be 80%, the other could put you at 81/82%. We may think either will work but for that time we used the number that didn’t work for you. Not on purpose, just happened.

My advice, to avoid the 1% issue, be there during the walk through and conveniently mention what your loan will be. Good appraisers don’t play with numbers but they also don’t want a loan killed due to the situation I described the paragraph above with GLA. We won’t ask the numbers because that is illegal, but it’s not illegal for you to say.

 

[Gunnerclone]

I think appraisers are required to use comparable sales that have closed. Thus sometimes their appraisals are behind the recent movement of the market. It is a difficult job as they are balancing the uniqueness of each property with market conditions and banker / borrower expectations.

You think houses are hard..try appraising farmland right now. Values are exploding to higher levels each week.

This. Or you may have a unique property that they have to extend past the neighborhood to get comps. In CBus a neighborhood that is hot hot hot may be right next to a cooler neighborhood. I don’t think appraisers take in to account how “hot” a neighborhood is in terms of the real estate market.

 

[SCNCY]

I think appraisers are required to use comparable sales that have closed. Thus sometimes their appraisals are behind the recent movement of the market. It is a difficult job as they are balancing the uniqueness of each property with market conditions and banker / borrower expectations.

You think houses are hard, try appraising farmland right now. Values are exploding to higher levels each week.

This true, if you look at the appraisal report, you will see the properties they used to form their calculations. In addition to the comps, they also put in a % premium or discount based on market conditions. So as a result, it takes time for the appraisals to catch up to current trends as you have to wait until the house closes before the comp is available.

In our market, we were told that some appraisals were coming back lower than asking, and therefore leverage for the buyer to negotiate down a little bit. We were hoping the same for our house, but ours came in $1,000 over what we offered. Must have been the sliver of ocean view we get.

Additionally, my first real estate agent told me to expect the appraisal to come in close to my offer as "they don't want to get in the way of a sale." And sure enough, in 2016, the appraisal came in $1,000 above what I offered, when I was the only offer on the house in Waldo in KC.

 

[BCClone]

We put a 15k gap in ours. It seems strange to me that multiple offers could come in at X and the appraisal says it's not worth X.

Lag can cause that. If a market heats up over two months, and pops 5-10% like people say it has, the appraiser may not have information for the prior two months since public records have not been updated. We may have good sales from last November but the pop hadn’t happened yet. Problem is, we have to be able to justify and quantify that pop. Pretty hard to do without identical houses beside each other selling within that frame and having full information.

 

[BCClone]

People with higher down payments will get offers accepted over people with hi internet offers but an FHA loan because the sellers don't want to deal with it. If I come in with 25% down the bank knows we're probably going to be able to make the payments. If I come in with 3% down FHA in the banks get a lot more cautious, which could potentially screw up the transaction for the seller.

Note to sellers also, FHA has certain guidelines for things. There are a few rules that houses (even ours don’t have). Many times buyers will force the sellers to remedy this (I don’t think it should be the sellers responsibility myself). One goofy thing is a CO detector in an attached garage. If you open the door and start your car for a couple minutes that thing is going off. Any steps over a certain amount (24 inches or so) require handrails. There are several others. If you can sell to a conventional loan, I advise it.

 

[BoxsterCy]

I drive a Jeep but I did buy an Audi logo online to paste over the Jeep logos.

Yeah, you're gonna have to trade up. Just keep it in the garage till you can shop around some.

You might also want to look into local covenants on bicycle brands. A pair of Trex to show off hanging from the garage ceiling is dujour. You don't have to ride them, just have the door open once in a while so peeps can see you have them. But not too much or you'll be looking to buy them back on Craigslist.