
04-22-2014, 06:30 AM
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Quote:
Originally Posted by Roaddog53
I just had to vent or ask for opinions, or both. I know home appraisals are subjective and definitely swayed if the house has sold when it is performed. I have been a part of these in various scenarios from selling , buying, boards of reviews, banking, and more. Banks use them mostly to insure the house is valued properly. Now the rub:
Most appraisals are performed from sales of homes in the area to determine market value. If a home sold pretty much that's the market value though. An appraisal will come in at that price give or take a few dollars.
The Villages sells homes at their prices. Right or wrong. Now IF TV discounts homes in an area to close out a neighborhood, the market price is what? Recently they discounted homes and within less than a few days an appraisal was done on one of those homes. Homes in that area that sold prior had the higher price. If the appraisal shows the discounted price as the "market value", TV than had those homes overpriced. So the homes that sold prior to the discount overpaid. So what is right? I have never agreed with appraisals.
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Appraisals on homes are not subjective. They are based on cold, hard facts although there can be some leeway.
99% of the time, it is a lender who is doing it for the purpose of a mortgage. Before the slump, a lender would take the most recent and comparable sales for the last six months. Today, they are pretty much only going by the last three months.
The appraiser will take sales which are closest in proximity to the subject property, as well as the identical floorplan, if possible. He will use square footage, no. of bedrooms, no. of bathrooms, etc. He will add or subtract when a house has/doesn't have upgrades, etc.
A seasoned appraiser usually doesn't need it, but there is a reference manual, available by subscription called Marshall & Swift. It shows the different amounts to add or subtract for everything you could possibly have in a house. In addition, it varies from area to area within the country, which makes this reference book very accurate.
If new construction is used as a comparable sale -- yes -- that still would be market value, even if the price was discounted. But that would only be one of a few properties used for the appraisal purpose. Generally speaking, it usually works out because the percentage of the discounted value of the new property (if that is what has been used in conjunction with other sales) is not really that significant. The only time a comparable sale could be more meaningful is when the property is a foreclosure or short sale.
I hope I didn't leave you with any cliff-hangers; I tried to be a little brief but still cover the salient facts. BTW, I've been an active and licensed (in Florida) Realtor/sales agent since 1984. I've given you some facts, not an opinion.
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