Help! Don't know what to do - Posted by Chad and Mindy

Posted by Rich (WA) on February 20, 2002 at 24:31:47:

Sorry. I wrote that post late at night. I meant appraisal not assessment…

Help! Don’t know what to do - Posted by Chad and Mindy

Posted by Chad and Mindy on February 18, 2002 at 21:13:47:

This is our 1st subject to house and we have been advertising for a tenant/buyer for about two weeks now. A guy calls us up and says he has 10k to put down and has good credit. He wants to buy the house outright and not lease option it from us. We are open to selling it now. We know that our inflated sales price of 138,000 will not appraise for that amount now (or at least we don’t think so). The comps in the area say it could possibly appraise for about $133,000. Is there a way that we could get his 10,000 to us directly and then write up a sales contract for the balance of 128,000 and then try to get him 100% financing or?..Please comment on different scenarios that we could possibly undertake. We appreciate it! C&M

Re: Help! Don’t know what to do - Posted by JamesL

Posted by JamesL on February 19, 2002 at 18:24:27:

Hi.
Call around to different appraisal companies…some appraisers will give you your 138k value that you need…as long as it’s not outrageously high. It needs to be believeable.
I used to spend soooo much time thinking up ways to raise the appraised value of my rentals…
With an appraiser that’s flexible, but still legal, you can get alot more done. Also, you might mention that you plan to be moving quite a few properties a year. Keep it legal though.
Happy Investing
JamesL

Re: Help! Don’t know what to do - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on February 19, 2002 at 11:29:37:

Why does the house need to appraise for $138k? The bank is concerned about loan to value. If this house appraises at $133k and the buyer wants a loan for $128k (138k-10k down) then the bank sees that it has a loan for $128k on a house worth $133k. That is a pretty high LTV, but I have seen mortgage companies settle for less.

If I were you, why not offer a small discount for cash? If you think that you can’t sell the house for more than it is appraised for then drop the house down to $135k or so. Yes, that will take $3k in profit out of your pocket. But you can get the cash now. Not wait until you sell this property on a L/O and hopefully close on the sale in two years. You did buy the house at a price so that you can drop the purchase price and still make money, right???

Re: Help! Don’t know what to do - Posted by Rob Aston (PA)

Posted by Rob Aston (PA) on February 19, 2002 at 11:14:31:

OK, You have a buyer for your house (You got it through ‘Subject to’), Now you need to get a lender that will do the type of closing you need to do. Well I’m not sure how appraisials in your area work. Get the lender and you have a sale.

Good Luck…

Rob

Re: Help! Don’t know what to do - Posted by Rich (WA)

Posted by Rich (WA) on February 19, 2002 at 03:34:46:

~A guy calls us up and says he has 10k to put down and has good credit. He wants to buy the house outright and not lease option it from us. ~

If he wants to buy the house out right why are you worried about the $10,000? Once he finances it through his own source you get your price.

True, but - Posted by Brent_IL

Posted by Brent_IL on February 20, 2002 at 24:19:40:

Most of the banks will want to use their own recommended appraisers unless it’s something like a FHA or VA loan.

If you’re willing to pay the big bucks, you can order a MAI appraisal for almost any selling price that you want.

Re: Help! Don’t know what to do - Posted by Rich (WA)

Posted by Rich (WA) on February 19, 2002 at 05:10:21:

One other thing occured to me. If you are concerned that his bank will not finance it at your asking price, what is the assessed value of you house? That is what a bank is going to look, at not the comp’s.

Nope… - Posted by Tim (Atlanta)

Posted by Tim (Atlanta) on February 19, 2002 at 11:23:17:

Don’t know what bank you deal with but every bank I have done business with wants to see the appraisal. They don’t care a whit what the tax assessor thinks the property is worth. The appraisal will come from comps, not the assessment.

Re: Help! Don’t know what to do - Posted by Sally (WA)

Posted by Sally (WA) on February 19, 2002 at 10:36:46:

Rich,

I don’t know where in Washington you are, but in all my deals in the Seattle/Tacoma area, the assessed value has NEVER come into the equation on determining the value of the property. This is true for SFH and for commercial. Banks here want the appraiser to show comps for SFH and CAP rates for commercial.

In my area the assessed values are always way under the comp price on a home. After we purchase, we generally get reassessed the following year to something within 10% of the selling price. So the only time you would get close to finding a property where the assesssed value is near the comp price is if you buy something that has sold in the last two years.

Re: Help! Don’t know what to do - Posted by John OH

Posted by John OH on February 19, 2002 at 06:25:19:

In the Mid-west a bank looks at the appraisal and are not too concerned of the assessed value. Assessed Values are typically lower than acutual value, otherwise we would all be in trouble. You should look at the comps, sales of similar age and style in same neighborhood for a more true value.
Good luck
John OH