Need real estate advice for Pa

[woodswise]

I am an attorney on the east coast, a significant amount of my practice involves real estate transactions. The real estate dealers in northern New England are mostly a decent bunch. Appraisers here are pretty ethical too.

GS: As for appraising a property at the purchase price, there is a good reason for that. If they find the comparables to be worth more than the purchase price, but the buyer and seller have agreed on this lower price for the subject property, then the lower price is the real fair market value as demonstrated by the agreement at hand, so long as it is an arm's length purchase. Not to mention, if the appraiser comes in with an equity above the purchase price that could complicate matters with the seller and with the bank.

In this case the buyer and seller need an appraisal to tell them the actual fair market value so the situation is quite a bit different (GS: I realize you know that bro).

 

[JR Ewing]

A friend of mine in the real estate business told me that one appraiser in Texas apparently went to prison after he got busted for falsifying appraisals on FHA loans. He was supposedly making the appraisals "work" however his buddies in real estate and lending would need him to.

They found out he wasn't even actually going out to the homes in many cases, and would often have a flunky go take a few pictures and measurements while he'd be out playing golf or whatever.

They even found him supposedly performing 2 different appraisals many miles apart in the same time frames on a few occasions.

Luckily most are smarter than that and realize they'll eventually get caught and at the very least ruin their careers if they're not honest. But of course there will always be a few bad apples in any bunch.

 

[Grumpyfit]

JR is right here, when we looked at an appraisal at one our properties they had the picture and measurements of the property next door. They ultimately fixed the foul up when we pointed this out.

 

[Billthebutcher]

To give you a little help when you sell a house the appraiser gets a copy of the purchase contract. Basically they are going to find homes near the same to use as comparable for the current value. As long as its not crazy they usually put down the purchase contract price. One appraiser years ago said it like this to me "what's the best comparable of a sale but what someone is willing to pay for the house" as long as you aren't putting in straw buyers or doing something illegal you should be ok with a fair number. Chase has a look up like Zillow or Trulia but they are all estimates. What you need to do is evaluate what you owe on the house what you want to walk away with and place a number on it from there. Remember I am assuming they will buy it FHA with 3.5 down payment if its renters usually they don't have 20% down. With that said you will need to add to the price seller concessions to pay taxes closing costs etc. FHA allows up to 5% of the purchase price for these concessions. I don't know what you are thinking about asking for the home, so I cant give you an idea of concessions. What I can tell you is get a good lender licensed in your state that will help you through the process and make sure you don't get killed on excessive appraisal charges and other BS charges. If you are wondering how I know this I am licensed in PA and 13 other states to do residential lending. Any other questions PM me. Its legal to have an appraiser check current sales in your area for free for you to give you idea of sale before he does a whole appraisal. Usually buyers pay for it anyways. You CANT just say I need this number can you make it happen lol. Hope this helps.

 

[Billthebutcher]

A friend of mine in the real estate business told me that one appraiser in Texas apparently went to prison after he got busted for falsifying appraisals on FHA loans. He was supposedly making the appraisals "work" however his buddies in real estate and lending would need him to.

They found out he wasn't even actually going out to the homes in many cases, and would often have a flunky go take a few pictures and measurements while he'd be out playing golf or whatever.

They even found him supposedly performing 2 different appraisals many miles apart in the same time frames on a few occasions.

Luckily most are smarter than that and realize they'll eventually get caught and at the very least ruin their careers if they're not honest. But of course there will always be a few bad apples in any bunch.

This is one of those stories that gives everyone in the industry a bad name. What is done now with all lenders is they are required to have all appraisals ordered by an appraisal management company, what this does it makes the person picking the actual appraiser and having most communication with the appraiser a third party entity. Years ago every appraiser would say what do you need? Now if you call the appraiser yourself without going through the management company kiss your license goodbye. Word the wise use companies to do your loans that has been in business for a while etc.

 

[shortz]

To give you a little help when you sell a house the appraiser gets a copy of the purchase contract. Basically they are going to find homes near the same to use as comparable for the current value. As long as its not crazy they usually put down the purchase contract price. One appraiser years ago said it like this to me "what's the best comparable of a sale but what someone is willing to pay for the house" as long as you aren't putting in straw buyers or doing something illegal you should be ok with a fair number. Chase has a look up like Zillow or Trulia but they are all estimates. What you need to do is evaluate what you owe on the house what you want to walk away with and place a number on it from there. Remember I am assuming they will buy it FHA with 3.5 down payment if its renters usually they don't have 20% down. With that said you will need to add to the price seller concessions to pay taxes closing costs etc. FHA allows up to 5% of the purchase price for these concessions. I don't know what you are thinking about asking for the home, so I cant give you an idea of concessions. What I can tell you is get a good lender licensed in your state that will help you through the process and make sure you don't get killed on excessive appraisal charges and other BS charges. If you are wondering how I know this I am licensed in PA and 13 other states to do residential lending. Any other questions PM me. Its legal to have an appraiser check current sales in your area for free for you to give you idea of sale before he does a whole appraisal. Usually buyers pay for it anyways. You CANT just say I need this number can you make it happen lol. Hope this helps.

The problem is, when you can go down the street and buy a foreclosure or short sale house comparable to mine, for about $60,000 less, it certainly makes what someone is willing to pay for my house a crap shoot. Again, I hate what happened to the market. They allowed all these people to foreclose or do short sales, dramatically saturating the market, and also bringing down the price of homes so much that the honest, good people that actually budgeted themselves, to be totally screwed. Even doing a short sale these days will destroy credit for 7+ years, so that's not an option for us. We looked in to all options, and are always told the same; we make too much money.

 

[Billthebutcher]

Well honestly a good appraiser will not count a short sale or a foreclosure in his comparable UNLESS there is NOTHING ELSE. That is pretty rare they will just move their search radius out further or on the actual appraisal they adjust for a non normal transaction, condition, etc. When people buy foreclosures they are never is good condition. So you will have that as a positive for you that your home is not in total disrepair. Don't worry these people that did foreclosures and short sales they screwed themselves as well. Ask them what rate they are paying on their cars 13 -22% and rarely can they get a credit card, it all comes around. The fact that you didn't let anything and have done the right thing is going to save you thousands in interest in the upcoming years. Its a huge positive that you have good credit still. I bet you if list it for a fair price you will be ok. Remember you can try to sell it yourself first save you the 6% realtor fee. Market is picking up and you have a buyer in the home you are ahead of 90% of people in same situation.

 

[woodswise]

The problem is, when you can go down the street and buy a foreclosure or short sale house comparable to mine, for about $60,000 less, it certainly makes what someone is willing to pay for my house a crap shoot. Again, I hate what happened to the market. They allowed all these people to foreclose or do short sales, dramatically saturating the market, and also bringing down the price of homes so much that the honest, good people that actually budgeted themselves, to be totally screwed. Even doing a short sale these days will destroy credit for 7+ years, so that's not an option for us. We looked in to all options, and are always told the same; we make too much money.

Brother that's how the free market works. I feel for you (and hope you come through this okay), but you should be the last one to complain about the free market functioning the way it is meant to.