So the house appraised exactly the same amount we bought it for. What?

[Dunkopf]

The first house we bought came in 2k lower than asking price that was in 99 during the start of easy financing. Next house in 2002 came in at exactly the asking price. We did a refi 2 years ago to get a better interest rate. The house came in about 25k lower than it needed to for the interest rate we were promised.

We thought it was fishy. I called around and found out that there is a new law since Obama came in that doesn't allow the finance companies to pick the appraisers anymore. They are drawn from a pool. This is supposed to stop all the shenanigans that were happening before the collapse with banks financing houses higher than they were worth.

They probably give the appraisers extra money to do what they want. In our case we had to pay 1.5 points to get a better rate. Still saves us 300 a month but added around 4500 to the note.

 

[Tala]

Most of the houses in my neighborhood technically appraise in the $10k range, and sell for $40-60k. They just "doctor" the appraisal as needed, just like the OP suspects. Must happen ALL the time!

 

[Sonoran Silkies]

Quote:
VERY well stated!

 

[Mattemma]

I think you would have to hire someone the bank does not. The guy who did our house for the re-fi appraised it at what the bank loan was for.How convenient.Funny thing is when we bought the house 5 years ago it was appraised for 20k more,and was exactly the amount the bank loan was for. Apprasials like mortgage surveys are a joke. You have to hire someone on your own.

Thing is though that no matter what they say the house can sell for way more or way less. It is all up to what a buyer is willing to pay for it.All the houses around us are selling for 80k to 30k now,but one person was able to sell their house (on their own) for 123k. I bet a realtor would have sold it for way less,because that is just how the market is here now-sell many houses at low prices.

I think a bank will go with whatever you are willing to pay if they think they can resell the house at a decent amount if you foreclose.

 

[wren]

Seems like lots of other people have experienced the same thing! What a racket! I guess it's worth whatever it sells for. I'm so disillusioned with this whole thing. I am grateful that the appraisal wasn't lower than what we paid for it.

The new problem is that the roof is 21 years old and we need insurance. So stressful!

 

[speckledhen]

As a realtor for 8 years in another long ago life, and as a many time buyer and seller of homes myself, I can tell you that usually, a home will appraise for exactly the sale price on the contract, providing that sale price is in line with comparable properties in the neighborhood or general vicinity. That's pretty much the way it was always done, unless there is something that makes it worth much less or much more than others like it.

 

[Sonoran Silkies]

When we purchased our home the appriasal included many photos of the home, the features of the home, the features of several other homes in the neighborhood that had sold within the last year. (No homes that had not sold were included--this was not a market comparison; much more detailed.) Costs were broken down per square footage of each home also, feature by feature, in a table showing the assigned value up or down for each feature that a different home had that ours did not, or that another lacked. For example, we have a sun deck on top of the garage--none of the other homes had one, so that was added to the value of our home in each comparison. Homes that had more bedrooms than our four, or a separate guest house deducted their value from our home.

All of that said, and the appraisal came in pretty close to or at the sales price--and this was long before the market turned crazy. The appraisal tells the bank what the home is worth as of the date of the appraisal. Real estate values are flexible--our home is still worth more than we paid for it, but far less than when the market was crazy.

 

[HarlansHollowFarms]

We are selling our house right now...we had it appraised and the value was a little higher then the offer we accepted. This still does not guarantee that the bank will loan the monies out to the buyer, it is usually based on the comparable sales in the area.

Since we live in a very rural area and have a log house on 20 acres, there were no comparisons for the bank to look at. We are really fortunate the underwriters for the loan agreed with the appraisal with the stipulation the buyer come up with a higher down payment since they were unable to compare it to similar homes. The appraisal is nothing without comparables, we got lucky and set the standard for homes with 20 acres, not that there will be many properties like that here.

The underwriter are bound by many more things now a days thanks to the crazy market, so they are being much more careful in lending money anywhere. Our housing market is booming, but they can not just go with that, they go with the nationwide regulations and they can not give us special treatment with loans. The price of my house has doubled in the last 6 years, as compared to the rest of the country loosing money, so it has made it really hard to get the money to buy and therefore difficult to sell.

I would say if your house appraised for what you paid and they looked at comparables in your area you are doing good, many have theirs appraise for less.

 

[teeville5]

Quote:
My thinking as well. We sold our house last year and the appraisal for it came in less than our asking price. My DH bought the house in 2005 for @ $86G as a foreclosure. We made improvements like finishing the basement, paint, and carpeting before selling. My DH was concerned at the time about the appraisal not coming in for the asking price, but with the improvements I thought it would and I was wrong. The appraisal came in $4G less. Unfortunately, our region had a lot of foreclosures and house values were down because these foreclosures were selling quite low.

 

[Dunkopf]

Foreclosures in the area really drive all the other values down. You get compared to 5 houses that sold for 300k then 2 that were foreclosure blowouts that sold for 60k. That's 1620.00 divided by 7 for an avg of 232k or so. House drops 70k because of 2 foreclosures in the area.

That's the worse part about someone walking away from their mortgage voluntarily.