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Mortgage Update with Silverton Mortgage

September 21, 2015 8:17 am


Today's real estate market is for the most part, a recovering market. The market is no longer saturated with short sales and foreclosures. Consumers are increasingly testing the waters to buy or sell a home. In most cases, the homes on the market are appraising; however, there is one scenario that is presenting itself too often in regards to recent appraisals.
Here is the scenario: A home is listed for sale. Since there are not any recent sales in the subject's neighborhood, the listing agent researches surrounding neighborhoods and uses both recent sales and current listings from outside neighborhoods to price the home. The home is marketed and an able and willing buyer puts in an offer close to the list price. The offer is accepted, an appraisal is ordered by the lender, and to the surprise of everyone involved, the home does not appraise.
What you need to know about this scenario: This is not a black and white scenario and is approached very differently from one appraiser to the next. It is imperative in this scenario, to fully support the approach to the list price with the appraiser. The law does not permit an agent to explain where he/she came up with the value.
Ideas to help in this scenario
: Remember book reports in school? The purpose of the exercise was to teach the student to get the point across. Create a "book report" of sorts for the subject property. Write a paragraph about how you came up with the value. Present comparables and make notes as to why you feel the comparables are relevant to the subject property. Present listings for the sole purpose of showing a picture of the present/future market. Include pending sales if possible. Put this information in a manila folder and write "FOR APPRAISER" in big, bold, legible print. Place the folder on the kitchen counter. In the event the appraiser does not call you, the information will still be available.

For the stubborn seller or a unique situation, order a seller appraisal. While the appraisal cannot be used by the buyer, the appraisal can help in two ways:
1. The appraisal can bring an overly zealous seller to reality regarding market conditions.

2. The appraisal will help you tell the story of how the value was determined.
Implementing the above strategies does not guarantee the home will appraise, but it will address questions regarding property values upfront and will help the over worked and under paid appraiser to understand the approach to the list price. True recovery demands the cooperation and team work amongst housing professionals. By working together and supporting our position with experience, we can not only recover as in industry, we can thrive. 
 
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