I really appreciate you taking the time to share your
experience with me.That’s what I like about this site,
there are always people willing and ready to lend a
helping hand.
I have received some good news since your last post.
First, from a loan officer at Sterling Capital. After I
explained my situation she referred me to their rehab
appraiser. She mentioned she has had several similar
situations where they have justified higher appraisals
based on the quality of rehab and improvements. It will
be interesting to hear what this appraiser has to say.
{This goes back to what you said in your earlier post;
The real question is, how much more and that’s where
the appraiser’s judgement comes in}
Second, A Realtor called me today and stated she had a
qualified Buyer for the property at $120K. When I told
her I was asking $150K she said there were no
comparable’s in the neighborhood for $150K. However, if
the property has had quality improvements and upgrades,
that it may be possible it may appraise at $150K.
Well, time will tell, however if a bonofied offer
comes in where I can close quickly, I will probably
eat my losses, pay off the interim financing due in
June 2002, take whatever I recoup and make sure that
I don’t over improve a property ever again.
Does anyone know if appraiser’s use comp’s from within the neighborhood of subject property or can they use comp’s
from other neighborhoods?
Getting ready to sell my finished house within a large
Zip Code area and found out from an appraiser that he can
only do comps from within 4 to 6 blocks within the same neighborhood where the subject property is located and not
the whole Zip Code or other Zip Codes for that matter.
Existing comps within the Zip Code area where property
is located should help appraise my property at over $150K +.
Comps from within 4 to 6 blocks of subject property are at
tops $130K.
Thanks in advance for your feed back. Also would appreciate
hearing from investor friendly Appraiser’s or individual’s
knowing an investor friendly appraiser in the Austin Texas.
Posted by Nate(DC) on February 05, 2002 at 12:58:52:
Jose,
It sounds like what you’re saying, to me, is that your house is an over-improvement for the neighborhood, in that it is a $150K house in a neighborhood of $130K houses.
Just because comps from outside the neighborhood are $150K does not make your house worth $150K. Heck, I bet if you moved an identical house to the best neighborhood in Austin it would be worth over $200K. It doesn’t prove anything.
But, at the same time, if your house IS better than everything surrounding it, then it’s worth more than $130K. The real question is, how much more, and that’s where the appraiser’s judgement will come in.
BTW, if you are selling the house to a buyer that is getting a loan, the buyer’s lender will designate the appraiser. You certainly don’t get that choice!
Thank you for taking the time to answer as an appraiser.
The subject property has become one of the best in
the neighborhood. I bought it as a “Burned Out” ready
to be torn down by the city. The house has been totally
rebuilt, same as a new house. The only old part is
the existing foundation (with an Engineer report).
I was hoping to receive a lead on an investor friendly
appraiser from the Austin area, but I guess no one on
this site knows of one and such appraiser’s don’t visit
this site.
Nate is right. If you are over improved, you are over improved and you won’t get credit for ALL of the improvements. He’s also right when he says if you are going to sell to a buyer who will get a traditional loan, YOUR appraisal won’t mean anything. They lender will designate an appaiser.
So what has the market told you about the value of this house? If it’s priced too high you won’t get any offers. If you get an offer quickly, that can some times influence an appraiser to go up some on value.
Posted by Nate(DC) on February 05, 2002 at 22:55:20:
Jose,
Actually, I am not a licensed appraiser, but I have worked for an appraisal firm before and have taken several classes in real estate valuation, so I do know what I speak of.
All that you have said here about making the house very nice is great, and I am sure it is a wonderful looking house, but does not change anything from my previous post.
Certainly, if you think you can find a buyer at $150K, then market the house at that price. If their lender’s appraiser comes back with a lower value, you may have to renegotiate slightly. However, who knows, the appraiser may come up with the value you need. Many appraisers are hesitant to come up with a number other than what the bank needs, unless there is a huge discrepancy, because they want to get repeat business from the bank. The bank stays in business by making loans, and if an appraiser kills too many loans he may not get much more work from that bank.
Also, as I mentioned before, I don’t know what good an “investor friendly” appraiser would do you because you generally don’t get to pick the appraiser.