All posts in Appraised Values

An Appraisal Can Change Your Interest Rate

by Justin Miller on August 16, 2011 in Appraised Values, Interest Rates with No comments

I have talked about this before and how the interest rate isn’t the most important part of the mortgage and how important the appraisal is.   This is especially true in a housing market like Fort Lauderdale and the rest of South Florida due to having so many foreclosures and short sales. 

Jack Guttentag who writes a lot of real estate related articles agrees with me in his latest article “Appraisal Can Trip Up The Mortgage Quote.”  I highly recommend reading this article.

“Changes in property value may affect the price by shifting the ratio of loan amount to property value (called the “LTV”) into a higher or lower band. These bands are 65.01 to 70, 70.01 to 75, 75.01 to 80, 80.01 to 85, 85.01 to 90, and 90.01 to 95. Borrowers who take a loan amount that places them at the top of an LTV band are highly vulnerable to a price increase resulting from even a small reduction in value.”

Fort Lauderdale Appraisals

by Justin Miller on August 13, 2011 in Appraised Values with No comments

If you think the most important part of your mortgage is your interest rate you better think again.  If the property doesn’t appraise it changes everything.  Appraisals are a big issue right now due to the change in the appraisal standards and the banks and brokers being required to use an Appraisal Management Company (AMC).

When your appraisal is ordered through an AMC you never know who the appraiser is going to be, if they know the area, how long they have been in the business, if they are conservative, etc, etc.  And the banks have ownership interests in the AMC.

You need to deal with a Mortgage Bank that picks their appraisers but has them rotated so that they are still compliant with the HVCC Appraisal Standards.  I will never work for a company that doesn’t do this that is how large of a role this plays.

Make sure to check out The Wall Street Journal article, “Judgment Call: Appraisals Weigh Down Housing Sales.”

How To Contest A Low Appraisal

by Justin Miller on May 10, 2010 in Appraised Values with No comments

You first need to make sure that you understand that you, your real estate, and mortgage professional are not appraisers.  Remember, we are all biased and of course we want it to appraise for what you are offering to buy it for. 

The article does give you some good information about checking for certain mistakes.  Also, it goes on to say “Don’t be ashamed to ask questions,” Straw said. “It is an opinion of value, and I underscore ‘opinion.’ What you are getting is a report of an appraiser’s compilation of data and interpretation of data.”  

The bottom line is that it is not easy to appeal an appraisal.  I personally think that the real estate agent on the transaction should meet the appraiser at the property, provide them with any relevant information, etc. 

“Be proactive, rather than reactive,” Sellers said. “If you are aware of a foreclosure down the street that is similar to yours, or a divorce case that would cause a sale to be low for high-pressure reasons… make [the appraiser] aware of that.”

http://www.marketwatch.com/story/how-to-fight-back-against-a-low-home-appraisal-2010-05-10?siteid=rss&rss=1

Appraisal Management Companies Conflict of Interest

by Justin Miller on January 29, 2010 in Appraised Values with No comments

This was not written by me but by Rob Chrisman who is a director of Capital Markets.  I found it very interesting since we have all own that the big banks have interests in the appraisal companies just like Countrywide did with Landsafe which the owned.  

“How far can an appraisal management company go toward originating mortgages? We may find out shortly. It is well know that many large companies such as Wells and BofA have interests in AVM’s but recently a story has made the press about an appraisal company getting involved in mortgage banking. Is it a possible conflict of interest? Stay tuned.”

http://www.prweb.com/releases/appraisal_management/hvcc_compliance/prweb3494924.htm 

Appraisals Continue To Devalue Devalued Properties

by Justin Miller on December 30, 2009 in Appraised Values with No comments

This Q&A from MarketWatch talks about changing appraisal standards and using short sales and foreclosures as comparables.  This is a big issue and the title of this post is exactly what has been happening. 

I see this day in and day out since most of my business is in the Fort Lauderdale, Florida area and we have been hit so hard by the housing bubble.  Appraisers just aren’t able to give the adjustments that are deserved for the condition of the property.  It’s not because of the appraiser and you could even argue it’s not the banks doing but it is due to the secondary market.  I really don’t care who is to blame but they need to change it especially since if you are a normal seller, not a distressed sale, you won’t get what you should for your property. 

http://www.marketwatch.com/story/is-it-time-to-change-home-appraisal-practices-2009-12-30?siteid=rss&rss=1 

Renovations Aren’t Paying Off

by Justin Miller on December 18, 2009 in Appraised Values with No comments

Like they used to according to the article below from CNNMoney.  I would have to agree based on what I see with appraisals.  Appraisers just aren’t able to give the adjustments that a property should receive for upgrades and renovations.  But then again I am in the Fort Lauderdale and South Florida market where your comparable sales are foreclosures and short sales. 

I am not a real estate agent but I am sure it helps you to sell your home faster so depending on how much faster it enables you, you might just recoup the costs.  For example, if a renovated home sells 2 months faster the seller saves 2 months worth of taxes and insurance. 

“The most financially successful jobs are smaller-scale, lower-cost renovations that improve the exterior appearance of homes. In this down real estate market, curb appeal is king.”

http://money.cnn.com/2009/12/18/real_estate/return_on_renovations/index.htm?section=money_realestate&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_realestate+%28Real+Estate%29

Home Pricing Calculator

by Justin Miller on December 4, 2009 in Appraised Values with No comments

This is from the Federal Housing Finance Agency’s website.  Although nothing is right on the money, it is fun to play with. 

Here is their disclaimer just as I mentioned about Zillow.com.  “When using the House Price Calculator, please note that it does not project the actual value of any particular house. Rather, it projects what a given house purchased at a point in time would be worth today if it appreciated at the average appreciation rate of all homes in the area. The actual value of any house will depend on the local real estate market, house condition and age, home improvements made and needed, and many other factors. Consult a qualified real estate appraiser in your area to obtain a professional estimate of the current value of your home…….”

 http://www.fhfa.gov/Default.aspx?Page=86 

Zillow & South Florida Property Values

by Justin Miller on December 3, 2009 in Appraised Values with No comments

You have to click on the link below to see the “Median Error” for Miami-Fort Lauderdale, it is 22.5%.  How can this be?  Well, Zillow doesn’t take into account property location, upgrades, condition, seller assist, etc. 

It is nice to see the view of the area and what your neighbor’s home sold for but that’s about it. 

http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm  

MillerOnMortgages.com- Staying updated on the current mortgage market in Fort Lauderdale, Miami, and Palm Beach

More On The New Appraisal Rule, HVCC

by Justin Miller on September 24, 2009 in Appraised Values, Conventional Loans with 1 Comment

The new rule that mortgage brokers and others have to order appraisals through a management company is still being argued.  Although I don’t have to order my appraisals through a management company, I am also opposed to this new rule because it is hurting our entire industry and real estate market. 

So how are they making out with getting this changed?  It is hard to say and who knows what will become of it.  The article below makes it sound like they are getting somewhere but you never know.  If you are unfamiliar with how it is affecting the industry make sure to read this article. 

It is causing property values to fall more than they should.  “To say a house that needs $200,000 in repairs to make it livable should appraise at the same level as a new house next door is ridiculous,” said Howard. “Right now, using these foreclosures as comparables without adjusting for condition can go unchallenged.”

http://money.cnn.com/2009/09/22/real_estate/industry_asks_appraisal_relief/index.htm?section=money_realestate 

Appraisals Still Under Fire

by Justin Miller on August 18, 2009 in Appraised Values, Conventional Loans, FHA Loans, General News with No comments

This is something new that I haven’t seen.  “Squeezed by a drop in fees, some appraisers are compensating by driving long distances to handle more assignments. Their wanderings are raising questions about whether they know enough about the neighborhoods to accurately assess the value of homes—which has implications for both home buyers and owners.”

http://online.wsj.com/article/SB10001424052970203496804574348712795471006.html?mod=rss_Weekend_Journal

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