Forum Replies Created
-
AuthorPosts
-
Bugs
ParticipantIt hasn’t happened yet but pretty soon some of these listing prices will be LOWER than some of the closed sales. Trust me when I tell you that when REOs comprise 30+% of the closed sales the competition between these lenders to underprice their competition will be significant.
During an increasing market an appraiser should be weighting pendings and listings if they can establish the relationship between the list prices and the closed prices. This is particularly true when bidding wars are common. The appraisers can see there is a trend toward increases and they have no way of knowing how high it will go. Well, the same applies – only in reverse – when the market is declining. The (lower) pending sale prices point the direction and the appraisers are supposed to be appraising toward the ever-reducing lower end of the range. That’s what I meant when commenting about how many appraisers have never operated in a declining market.
What this means is that even though a lender might allow 6-month old sales data in an appraisal report, they’re not going to allow those sales to be given undue weight because the market conditions then were better than they are now. A lot of loan originators and agents are going to be shocked when they start seeing this. They may find that exceptional buyer and come to a contract price and they may think that based on sales from a few months back that the loan is a lock, right up until the lender cuts the loan amount back because of current listing activity.
Lenders really only pay attention to appraisers and support the use of appraisals when the markets are in decline and it’s their money that’s on the line.
ParticipantIt hasn’t happened yet but pretty soon some of these listing prices will be LOWER than some of the closed sales. Trust me when I tell you that when REOs comprise 30+% of the closed sales the competition between these lenders to underprice their competition will be significant.
During an increasing market an appraiser should be weighting pendings and listings if they can establish the relationship between the list prices and the closed prices. This is particularly true when bidding wars are common. The appraisers can see there is a trend toward increases and they have no way of knowing how high it will go. Well, the same applies – only in reverse – when the market is declining. The (lower) pending sale prices point the direction and the appraisers are supposed to be appraising toward the ever-reducing lower end of the range. That’s what I meant when commenting about how many appraisers have never operated in a declining market.
What this means is that even though a lender might allow 6-month old sales data in an appraisal report, they’re not going to allow those sales to be given undue weight because the market conditions then were better than they are now. A lot of loan originators and agents are going to be shocked when they start seeing this. They may find that exceptional buyer and come to a contract price and they may think that based on sales from a few months back that the loan is a lock, right up until the lender cuts the loan amount back because of current listing activity.
Lenders really only pay attention to appraisers and support the use of appraisals when the markets are in decline and it’s their money that’s on the line.
ParticipantIt hasn’t happened yet but pretty soon some of these listing prices will be LOWER than some of the closed sales. Trust me when I tell you that when REOs comprise 30+% of the closed sales the competition between these lenders to underprice their competition will be significant.
During an increasing market an appraiser should be weighting pendings and listings if they can establish the relationship between the list prices and the closed prices. This is particularly true when bidding wars are common. The appraisers can see there is a trend toward increases and they have no way of knowing how high it will go. Well, the same applies – only in reverse – when the market is declining. The (lower) pending sale prices point the direction and the appraisers are supposed to be appraising toward the ever-reducing lower end of the range. That’s what I meant when commenting about how many appraisers have never operated in a declining market.
What this means is that even though a lender might allow 6-month old sales data in an appraisal report, they’re not going to allow those sales to be given undue weight because the market conditions then were better than they are now. A lot of loan originators and agents are going to be shocked when they start seeing this. They may find that exceptional buyer and come to a contract price and they may think that based on sales from a few months back that the loan is a lock, right up until the lender cuts the loan amount back because of current listing activity.
Lenders really only pay attention to appraisers and support the use of appraisals when the markets are in decline and it’s their money that’s on the line.
ParticipantThere are different types of pretentiousness. I think the laid-back casual image SD locals strive to project is in many cases nothing but another expression of pretense. It’s like saying “Look at me, I have the tan and the beemer and I can do it all without working 80 hours/week, wearing a tie, or selling out to the man”.
We have LOTS of snobs here.
ParticipantThere are different types of pretentiousness. I think the laid-back casual image SD locals strive to project is in many cases nothing but another expression of pretense. It’s like saying “Look at me, I have the tan and the beemer and I can do it all without working 80 hours/week, wearing a tie, or selling out to the man”.
We have LOTS of snobs here.
ParticipantThere are different types of pretentiousness. I think the laid-back casual image SD locals strive to project is in many cases nothing but another expression of pretense. It’s like saying “Look at me, I have the tan and the beemer and I can do it all without working 80 hours/week, wearing a tie, or selling out to the man”.
We have LOTS of snobs here.
ParticipantIt is at this point that things start getting “interesting” with the appraisals. Fully half the residential appraisers we have right now have no familiarity with a declining market because they haven’t been at it long enough. A couple of the lenders are now requiring listing and pending sales in their appraisals and the underwriters are giving the appraisals much closer scrutiny than they were even a year ago.
The era of the stupid appraisal is (mercifully) coming to an end – for now anyway. Those appraisers who don’t straighten out are gonna get kicked out.
This crackdown will have some collateral damage – there will be a few legitimate sales contracts that will not appraise out because of the combination of fewer sales and extenuating circumstances with some of the sales that do close. That’s life during a declining market.
ParticipantIt is at this point that things start getting “interesting” with the appraisals. Fully half the residential appraisers we have right now have no familiarity with a declining market because they haven’t been at it long enough. A couple of the lenders are now requiring listing and pending sales in their appraisals and the underwriters are giving the appraisals much closer scrutiny than they were even a year ago.
The era of the stupid appraisal is (mercifully) coming to an end – for now anyway. Those appraisers who don’t straighten out are gonna get kicked out.
This crackdown will have some collateral damage – there will be a few legitimate sales contracts that will not appraise out because of the combination of fewer sales and extenuating circumstances with some of the sales that do close. That’s life during a declining market.
ParticipantIt is at this point that things start getting “interesting” with the appraisals. Fully half the residential appraisers we have right now have no familiarity with a declining market because they haven’t been at it long enough. A couple of the lenders are now requiring listing and pending sales in their appraisals and the underwriters are giving the appraisals much closer scrutiny than they were even a year ago.
The era of the stupid appraisal is (mercifully) coming to an end – for now anyway. Those appraisers who don’t straighten out are gonna get kicked out.
This crackdown will have some collateral damage – there will be a few legitimate sales contracts that will not appraise out because of the combination of fewer sales and extenuating circumstances with some of the sales that do close. That’s life during a declining market.
ParticipantEver see a 13-yr old smoking? They think it makes them look more adult, but really it just reinforces how foolish it is to try and fool other people.
ParticipantEver see a 13-yr old smoking? They think it makes them look more adult, but really it just reinforces how foolish it is to try and fool other people.
ParticipantEver see a 13-yr old smoking? They think it makes them look more adult, but really it just reinforces how foolish it is to try and fool other people.
August 9, 2007 at 1:01 PM in reply to: Where is the Outrage? Realtors gone amok,still ripping off the Banks #72295ParticipantThat’s true. Maybe Super Jannae really is the lynchpin in some market manipulation in those neighborhoods, too.
There’s just not enough information on those blog entries for me to make the assumption one way or the other about these sales. I think the buyers are being dumb from a financial perspective, but that doesn’t make these crooked deals. I guess if I looked around I could have an opinion but as of right now the use of 2001 sale prices as an indication that these are far overpriced in 2007 just doesn’t do it for me.
There are enough real problems out there to go chasing inconclusive scenarios.
August 9, 2007 at 1:01 PM in reply to: Where is the Outrage? Realtors gone amok,still ripping off the Banks #72414ParticipantThat’s true. Maybe Super Jannae really is the lynchpin in some market manipulation in those neighborhoods, too.
There’s just not enough information on those blog entries for me to make the assumption one way or the other about these sales. I think the buyers are being dumb from a financial perspective, but that doesn’t make these crooked deals. I guess if I looked around I could have an opinion but as of right now the use of 2001 sale prices as an indication that these are far overpriced in 2007 just doesn’t do it for me.
There are enough real problems out there to go chasing inconclusive scenarios.
-
AuthorPosts