Updates from August, 2012

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  • How-To Make Sure a Home Is Appraised Accurately

    12:57 pm on August 2, 2012 | Comments:0
    Tags: , , , ,   Filed under: Agent advice, Buyer Info, Consumer news and advice, Home owner information, Property Appraisal, Seller Info

    (MCT)—Despite a steadying housing market, sellers and real estate agents still complain that low appraisals delay or kill up to 15 percent of all deals.

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  • The Top 5 Reasons Deals Fall Apart

    9:09 am on May 24, 2012 | Comments:0
    Tags: , qualify, ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Credit, Finance, Home owner information, Property Appraisal, Seller Info, Short Sale

    by Dean Hartman on May 24, 2012

    I’ve been told that 29% of all contracts signed never make it to the closing table- that nearly 3 in 10 transactions where a buyer and seller have come to terms (no easy feat in this market) fall apart. In a more normal market, I would say 90% of deals close. So, I figured if I could point out some of the reasons deals are crumbling, maybe those putting them together could prevent some of the challenges.

    1. Short Sales – In theory, they sound terrific because the buyer can low-ball an offer. They get little resistance from the seller (because the seller isn’t getting any money out of the deal anyway). However, the existing lender isn’t just accepting any offer. Appraisals are done and scrutinized. Lenders are not agreeing to deep discounts. Additionally, the lenders are still, in many cases, taking months to make decisions and many buyers are losing patience and withdrawing offers (and finding another house).

    (More …)

     
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  • Do Appraisers Use Distressed Properties as Comparables?

    5:14 pm on February 8, 2012 | Comments:0
    Tags: , , , , , , ,   Filed under: Agent information, Buyer Info, Consumer news and advice, Foreclosure, Home owner information, pricing, Property Appraisal, Seller Info, Short Sale, Short sales

     

    Many of our readers ask us if appraisers use distressed properties (short sales and foreclosures) as comparables when doing an appraisal on non-distressed properties. We have posted on this issue on several occasions (examples: here and here). Last month, the Appraisal Institute issued a paper on the subject. In the paper, the Institute explained that:

    “Foreclosures and short sales can provide important information for appraisers, who develop valuations based on market data and market forces.”

    On whether an appraiser should use distressed properties as comparables, the Institute was very direct (all items in bold were shown as bold in the original paper):

    “An appraiser should not ignore foreclosure sales and short sales if consideration of such sales is necessary to develop a credible value opinion.”
    And they explained the possible differences between short sales and foreclosures:

    “A short sale … might have involved atypical seller motivations and so might not be an ideal comp…

    A sale of a bank-owned property might have involved typical motivations, so the fact that it was a foreclosed property would not render it ineligible as a comp.”

    Bottom Line

    Some will argue that distressed properties should not be used when appraising non-distressed properties. However, there is no longer any doubt that they will be.

    http://www.kcmblog.com/2012/02/07/do-appraisers-use-distressed-properties-as-comparables/

     
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  • Does Your Lender WANT To Say “Yes!”?

    12:08 pm on June 9, 2011 | Comments:0
    Tags: , , , ,   Filed under: Buyer Info, Credit, Interest Rates, mortgage, Property Appraisal

    by Dean Hartman on June 9, 2011

    As people go through the mortgage process today, I believe that they wonder if their lender has gone insane. Lenders ask for documentation repeatedly, constantly updating, asking for further clarification and explanation for everything. Income, credit, assets and appraisals are scrutinized at a level unseen in my 25+ years. It almost seems like they are trying to find reasons NOT to lend.

    But, I assure you, that is not the case. The only way lenders can stay in business is to lend money. It is what funds the operation and pays for salaries, rent and paper clips. Lending is what creates the value of the company. No closings, no revenue, no company.

    So why the perception of over-documentation and over analysis when we know the lenders have to make loans? This is the reality of a post-subprime world. Lenders got too liberal and under-documented files and forgot the primary role of underwriting (judging a borrower’s ABILITY and WILLINGNESS to repay the loan) as they approved files. And now, the pendulum has swung back to a very conservative stance. Common sense seems to have been replaced by a “Cover Your Butt Mentality”.

    No one is immune. Appraisers error on the side of lower valuations and heightened criticism of a home’s condition.  Underwriters labor over pay stubs, tax returns, bank statements and credit information. Closing agents meticulously examine title and closing documents. Each of them has learned that their mistakes, miscalculations, or errors in judgment (no matter how minor) can result in a loss of their job, a bad loan, and/or monetary damages to their companies.

    So, today I just wanted to counsel home buyers. Your lender WANTS to make your loan. However, understand that they have been burned by borrowers, burned by their bad judgment, burned by moronic industry trends of the past. Lenders are going to be a little gun shy. If you can prove that you are willing and able to repay the loan, lenders have lots of money available at incredible (once-in-a-lifetime) rates. When you think your lender is asking for too much, know it’s because they want to say “yes” AND know that their decision is both a good and defendable one.

    http://kcmblog.com/2011/06/09/does-your-lender-want-to-say-%e2%80%9cyes%e2%80%9d/#more-8191

     
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  • Appraisals: Why You Must Now Sell Your House Twice

    1:00 pm on May 24, 2011 | Comments:0
    Tags: , , ,   Filed under: Buyer Info, Consumer news and advice, mortgage, Property Appraisal, Seller Info

    by The KCM Crew on May 24, 2011

    Banks have become very conservative when lending mortgage money today. With the current foreclosure challenges in the country, we can’t really blame them. The requirements now necessary to qualify for mortgages have gotten much more stringent and it seems will get even more stringent as we move forward. The banks want to make sure the prospective buyer has the ability to repay the loan. However, this does not just involve the borrower buying the property.

    The second way a bank can protect their investment in the mortgage is to make sure that the collateral backing that mortgage is secure. That is where the appraisal comes in. The bank wants to make sure that, should the buyer not be able to make their payments, the house they will be forced to take back will sell for an amount at least equal to the balance left on the mortgage. For that reason, the banks seem to be getting more conservative with appraisals also.

    This past week, the National Association of Realtors (NAR) released their Existing Homes Sales Report. In that report, they said:

    “11 percent of Realtors® report a contract was cancelled in April from an appraisal coming in below the price negotiated between a buyer and seller, 10 percent had a contract delayed, and 14 percent said a contract was renegotiated to a lower sales price as a result of a low appraisal.”

    One out of four real estate transactions was either cancelled (11%) or renegotiated to a lower sales price (14%) because of a low appraisal!!

    Bottom Line

    Every house now has to be sold twice: first, to a potential purchaser and then to the bank appraiser. And, it seems that the second sale may be the more difficult of the two. Sit with a local real estate professional and make sure you put together a plan for both sales.

    http://kcmblog.com/2011/05/24/appraisals-why-you-must-now-sell-your-house-twice/#more-8076

     
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  • Who Actually Works On Your Mortgage File?

    10:06 am on September 30, 2010 | Comments:0
    Tags: , , ,   Filed under: Buyer Info, Consumer news and advice, mortgage, Property Appraisal

    by Dean Hartman on September 30, 2010

    One thing I have learned is that many customers meet with a loan officer and fill out an application and then they feel like they enter a black hole. They don’t know “what happens next” or “who all these people are”. Today, I thought I might shed some light on the typical roles and responsibilities of the participants. Now not every company has the same job descriptions and workflow procedures, but since we all have to end up in the same place, they are fairly similar.

    I will assume your loan officer helped you complete your application and explained all the disclosures, including the Good Faith Estimate and Truth-In-Lending, and they gathered much of your documentation to support your income, assets and credit-worthiness. Further, they ran your credit report and maybe even obtained an approval through an automated underwriting system. Of course they advised you as to loan product options and discussed rate lock choices. For most, the amount of information can be overwhelming. But what happens next? (More …)

     
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  • Residency and Portability - By Bill Furst, Sarasota County Property Appraiser

    11:40 am on December 3, 2009 | Comments:0
    Tags: bill furst, , homestead exemption, market value, portability, , residency, save our homes, tax year   Filed under: Property Appraisal

    What is requirement to be a Permanent Resident?
    Did you recently relocate to Florida and have questions about the residency requirements here because they may be different from the state where you lived before? We frequently receive questions about this important subject and hope the following information provides a clear understanding of what it means to have permanent residency.

    Please click the document below to download, save and print a full PDF version of this flyer.

    MS&C handout1

     
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