Real Estate

[Bob Borzelleri]

We had our home appraised several years ago for a refinance to take advantage of tanking interest rates. The initial appraisal mischaracterized our sq ft total by 300 sf. He ignored two sales on our street of 8 5 acre parcels and came up with two comps that were nearly 20 miles away and 20+ years older than our house.

I protested the appraisal to the lender and they agreed to send someone else out. Suddenly the house went up nearly $200K. Appraising can be a fast and loose art form.

[Thomas McCurnin]

I guess I am not understanding why the appraiser is involved at all.

Seller sets a price. Buyer agrees to a price. Property sells.

Only a fool would accept an offer which is contingent on financing--that is the Buyer's problem.

Buyers should already have loan approval and assuming a substantial down payment, like 30-50%, any lender appraisal should easily cover that amount of debt. In any case, it shouldn't be your problem.

Re-list the property with no contingencies except inspection, sale to close within 60 days, or the deal is off.

[Brian Elfert]

I guess I am not understanding why the appraiser is involved at all.

Seller sets a price. Buyer agrees to a price. Property sells.

Only a fool would accept an offer which is contingent on financing--that is the Buyer's problem.

If the buyer can't get financing are you going to sue the buyer to complete the sale? Mortgage companies typically require an appraisal as a condition of lending the money.

[Bill George]

I guess I am not understanding why the appraiser is involved at all.

Seller sets a price. Buyer agrees to a price. Property sells.

Only a fool would accept an offer which is contingent on financing--that is the Buyer's problem.

Buyers should already have loan approval and assuming a substantial down payment, like 30-50%, any lender appraisal should easily cover that amount of debt. In any case, it shouldn't be your problem.

Re-list the property with no contingencies except inspection, sale to close within 60 days, or the deal is off.

The appraisal is needed for the loan. You must not have sold property much, people do not normally have $400,000 or? cash to purchase a house or whatever and need a loan. That is why I suggested he get an independent one of his own. Right now its a buyers market and sometimes if you need to sell its not what you really wanted for the selling price.

BTW there are a lot of sales made subject to getting financing, that's just the way it works in real estate sales.

[Ronald Blue]

If the appraisal was done as they are here they list comparable properties to back up the amount they arrive at for value. Right or wrong it's the accepted method. If there are special features that you aren't getting credit for there might be an appeals process available. Also you may want to get it appraised by someone not connected to the purchase. As others have said the buyer can only get a loan based on the appraiser's valuation. Sentimental value isn't taken into consideration. If you don't have to sell maybe you should wait if the market is soft.

[Jim Becker]

Comps are not always reliable. In my little story above, that was absolutely the case with our old property. The comparables were within reasonable distance, included the historical component, property size, square footage, premium amenities, etc., but they did not balance out things like perceived road noise, a close neighboring structure, etc. The demographic that would and could pay the money rulled the property out because of outside factors. That cost us...two hundred grand.

[Mike Henderson]

If the buyer can't get financing are you going to sue the buyer to complete the sale? Mortgage companies typically require an appraisal as a condition of lending the money.

If there are no contingencies and the buyer refuses to go through with the purchase, the most common relief is that the buyer loses his/her deposit. In this area, no matter what the buyer does, it's difficult for the seller to keep the deposit.

Technically, the seller could sue to try to force the sale, but if the buyer doesn't have the money, that's not going to work. If the seller then sells the property for less, sometimes the seller can bring an action against the original buyer to recover the difference. But the amount of money usually makes that not worth while.

Mike

[Jim Koepke]

Jack, you do not mention the acreage or if there is an orchard of fruit trees.

When the wife and I were looking for property in Northern California we found some wonderful places in an area we liked. That was about a year before we were ready to commit. When we went up the next year prices had doubled and even more in some places.

What happened? Turns out the Los Angeles Times ran an article about how nice and livable the area was. So many people ready to retire sold their homes in Southern California and purchased retirement homes on the Northern California coastal area. This was the Eureka California area in 2007-2008.

Not sure if you live anywhere near the coast or not.

My thought is you may want to run an advertisement to appeal to a Southern California audience.

Things that might be impressive is picture of a good garden.

Maybe a woodlot for winter heat.

How is the hunting in your area?

Do you get snow in the winter?

Do you have a well?

How far is it to amenities like groceries and medical services.

How far away and how many neighbors?

My home is out in the sticks, a fair number of houses around with average of 5 acre lots. At night it is quiet enough I can hear a creek running that is about a hundred yards from my bedroom.

The art of selling is finding the target market and selling the view and other desirables.

Some about to retire sunset lover would jump at the chance to be sitting at your kitchen table with a beer or a cocktail and just taking it all in.

jtk

[Rick Potter]

As I understand it about 15 years ago CA passed a law requiring the lender to use an assigned appraiser, from a pool, rather than using their own, or choosing a specific appraiser who was known to "lean' one way or the other. I suppose they could contest the appraisal and possibly get another.

I know this was still in effect in 2020 when I bought my last property. I think it went into effect after the '06-08 reset.

[Thomas McCurnin]

If there are no contingencies and the buyer refuses to go through with the purchase, the most common relief is that the buyer loses his/her deposit. In this area, no matter what the buyer does, it's difficult for the seller to keep the deposit.

Technically, the buyer could sue to try to force the sale, but if the buyer doesn't have the money, that's not going to work. If the seller then sells the property for less, sometimes the seller can bring an action against the original buyer to recover the difference. But the amount of money usually makes that not worth while.

Mike

+1

This is how one sells property these days. No contingencies. The appraiser becomes irrelevant for purposes of the Seller. If from the Buyer's side, the appraisal is low and the Buyer can't get financing, then after 60 days, the deposit is given to the Seller as liquidated damages, and the Seller can re-list the property.

Having a sale contingent on Buyers' obtaining a loan could conceivably stretch out the process for months and months and might be a nice bargaining chip for the Buyer to lower the price significantly. Don't do it, sale is listed with no contingencies.

[Doug Garson]

Can't imagine anyone making an offer without getting pre approved for a mortgage or making the offer contingent on financing. Also making an offer not contingent on a home inspection would be dangerous, can't imagine anyone doing that either unless it is a red hot seller's market and they are desperate.

[Bill George]

+1

This is how one sells property these days. No contingencies. The appraiser becomes irrelevant for purposes of the Seller. If from the Buyer's side, the appraisal is low and the Buyer can't get financing, then after 60 days, the deposit is given to the Seller as liquidated damages, and the Seller can re-list the property.

Having a sale contingent on Buyers' obtaining a loan could conceivably stretch out the process for months and months and might be a nice bargaining chip for the Buyer to lower the price significantly. Don't do it, sale is listed with no contingencies.

This is how one sells property these days.

That does not happen today in this Buyers market. Loans are hard to get on good terms, Interest rates are high. Maybe in California but not the rest the country. The Buyer does not automatically forfeit the Earnest money to the Seller.

[Ron Citerone]

Can't imagine anyone making an offer without getting pre approved for a mortgage or making the offer contingent on financing. Also making an offer not contingent on a home inspection would be dangerous, can't imagine anyone doing that either unless it is a red hot seller's market and they are desperate.

The issue isn’t so much the pre approval for the buyer, it is the bank doesn’t want to lend more than the house is worth. That’s how I understand it. My first buy almost fell through because the banking market was swamped. I had a contingency clause, but the agent drove to the bank in town to get the check. Home inspections are a get out of jail free card for buyers in some cases.

[Thomas McCurnin]

Really depends on the down payment. If a buyer puts down 20-30%, loan to value would be very appealing to a bank. Interest rates are under 6% for new purchase with that kind of down payment.

[Ron Citerone]

Really depends on the down payment. If a buyer puts down 20-30%, loan to value would be very appealing to a bank. Interest rates are under 6% for new purchase with that kind of down payment.

Sure, the bank wants to know they can get the loan balance back if they have to foreclose.