Will your home appraise?

I had a question thrown at me the other day. My client/customer refuses to adjust the price of their home because they must net X amount! Once we procure a purchase agreement, “how can I be certain it will close?” We can never predict an outcome of this nature, however with some thought and preparation, and informing the buyers that the appraisal may not match the contract price we have several options.

A) Presuming this is a CASH offer an appraisal is not necessary, however if I’m representing the buyers, I would certainly advise this. In a perfect world, I’ve seen this happen! Back before the Real Estate crash of 2008, lenders nor cash buyers cared! Mortgage brokers wanted the deal, buyers wanted the home for fear they would loose their chance of obtaining the home of their dreams. The buyers made offers on half a dozen homes and lost their bid, due to more than multiple offers in a transaction.

B) In today’s world, buyers have many choices. It’s my opinion buying a home that was or is a builder’s model, is a very bad idea. The buyer is obtaining a property that has exceptional features and that can be great, however when this homeowner attempts to sell, the challenge? Ninety percent of the time it will not appraise, you ask why? Living in a home with remarkable features is extremely satisfying, it’s extremely challenging to o get your equity out of the home. Appraisers are required to appraise, by location, and the bare bones of the property, nothing more.

C) Many appraisers lost their licenses in the late 2000 early 2010 evaluation due to pressure and practices that were not always the most professional. The state pounced on these carless individuals and legislation changed the requirements. The most stringent of this criteria, requiring a Bachelor’s degree and internship in order to obtain a license.

D) Appraisers can be overwhelmed with orders, and to streamline their business they hire or contract data collectors and at times have individuals perform drive by observations with photos. He or She examines the data and photos, thus determining the value and go to the next appraisal. An appraiser is not required to complete an analysis with any more detail. Missing content value, is actually something appraisers ethically cannot include in their value.

I will continue to share examples and go into detail defining the term diminishing return, all of which are factors in an appraisal. To be safe in any real estate transaction, keep in mind the bones and location are the subject matter, not detailed amenities offered in a model home, or a home with too many amenities to support the market value.

Author: danswingblog

Dan has celebrated over 19 years as a full-time Realtor. Successfully listed and sold homes well through the 8 figure market. Advises and assists clients with challenging Portfolios! Not uncommon to be working with foreign nationals, buyers that leverage the Sterling, Euro, and similar currency. Dan welcomes the Global community, with friends in many Nations. He brings a reputation for Integrity, Expertise, and Focus. Our customers deserve the best. Currently provides Residential and Commercial B.P.O.'s, Broker Price Opinions, B.O.V's, Broker Opinion of Value to many lenders. Manage and Sells R.E.O., Real Estate Owned properties, distressed properties! Evaluate and negotiate solutions for sellers and lenders. Developed, operated and sold a Florida "AWARD WINNING" Ad Agency! 2010 & 11 Commercial Agent of the year. RE/MAX Paramount Properties. Relocated to Tampa in 2012, enjoyed retirement for 6 months. Saw unethical practices by some Realtors and choose to reverberate our profession in the Tampa area. In four years built his business to as many as four (4) transactions monthly. Mortgage brokers were calling Dan a Superstar in Real Estate. Dan and his wife relocated to North East Florida, to the community of Nocatee. Currently focusing on 55 and older communities and Luxury Real Estate. Successfully closed on many extremely challenging foreclosures, and Short Sale. Coached and participated in Commercial and Multi-Income Family REO's in the past six years. Elected to the Auburndale City Commission in 1986-88. Created and served as 1st Redevelopment Chair in 1988 & 89 personally put in place all the elements for the Auburndale CRA. 1990 City Commission refused to give a full vote of confidence. After a 5 year journey to personally raise funding, extensive research and study for the CRA district perimeters, and stunned with the Commissions doubt. Positioned himself to run for office again, was re-elected to Auburndale Commission, to serve 1991-93 to full fill the CRA master plan! Active with the Central Florida Development Council from conception in 1985 and sat on the board periodically for the past 25 years representing municipalities and private investors. The positions Dan held from 1986 through 1993 enabled him to have a complete workable understanding of the State of Florida Comprehensive Plan for Future Land Use, and the benefits of intergovernmental agreements, utility franchise expansions, and public/private partnerships! Specialties: Assets recovery & receivership, Real Estate Portfolio's, REO & Short Sale of Residential and Commercial negotiations, marketing consultant, public relations, and Broker Price Opinions for residential and commercial lenders.

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