Appraisal question

loumatt · #1 01-01-2011, 04:30 AM

1st Happy New Year to all forum members. Best of luck in 2011.

Now to the question-
I was wondering if anyone has advice on how to better my chances with a favorable home appraisal when a potential buyer wants to purchase a completed flip.
Is this strictly based on comps or are there other factors that can go into the formula.
Sometimes I can't reason how a certain house can get the numbers they need for a mortgage and others on the same street and seemingly just as nice don't.

Thanks

flippinout · #2 01-01-2011, 07:59 AM

Happy New Year to you too LouMatt.

I will get someone in here that can give you the information you need, but give them a little while as today is New Years Day and most everyone is at home relaxing today.

JaredfromIndiana · #3 01-01-2011, 12:34 PM

Quote:

Originally Posted by loumatt

1st Happy New Year to all forum members. Best of luck in 2011.

Now to the question-
I was wondering if anyone has advice on how to better my chances with a favorable home appraisal when a potential buyer wants to purchase a completed flip.
Is this strictly based on comps or are there other factors that can go into the formula.
Sometimes I can't reason how a certain house can get the numbers they need for a mortgage and others on the same street and seemingly just as nice don't.

Thanks

Mornin! I'm a full time Realtor here in Fort Wayne, IN. Appraisers have their hands tied these days and appraisals are TOUGH and there is no legal secret to better your chances.

Comps are key. Appraisers can only use comps that have sold in the last 6 months and are in a certain radius of the home in question. Don't quote me, but I believe it is a 1 mile radius.

The only advice I would give is to have your home spotless before selling. If it needs fixed, fix it. I'm sure this isn't the answer you were looking for but I hope it helps. Good luck to you!

loumatt · #4 01-02-2011, 03:08 AM

Thanks for the replies.I figured it was probably decided by computer and the appraiser coming out would be a formality that would mean little but just thought possibly there may be a trick or two.
I don't really get how the previous sales make up the new prices.
How does growth or improvement occur if it is regulated like this?

flippinout · #5 01-03-2011, 10:52 PM

Hi there Lou, let me see if I can get Jared back in here to answer this for you. Hes one of our resident experts and knows much more about this aspect of flipping than I do.

Give it a while please. Jareds a busy man.

JaredfromIndiana · #6 01-03-2011, 11:35 PM

Quote:

Originally Posted by loumatt

Thanks for the replies.I figured it was probably decided by computer and the appraiser coming out would be a formality that would mean little but just thought possibly there may be a trick or two.
I don't really get how the previous sales make up the new prices.
How does growth or improvement occur if it is regulated like this?

Amen amen amen Lou!! I have asked myself the same question OVER AND OVER. Housing prices are down right? If appraisers can only use the limited amount of criteria then housing prices will never come back. It's a frustrating part of today's real estate market but it will change at some point. It can't stay the same...

My two cents.

flip_it_fast · #7 01-04-2011, 05:32 PM

That is a very good, valid question and one that never occured to me before.

How does it all work? How do home prices increase with this system? I don't know but I do know that they do increase. They are as we speak, at least some.

Any appraisers out there please respond! I would love to know this one myself.

badmomma · #8 01-04-2011, 08:47 PM

There are some tools available that allow you to get an appraisal value on your own. Just a tool available online. Your actual value may be different as others have stated.

Quote:

What’s the difference between an appraisal and a comparative market analysis? Good question!
An appraisal is a certified appraiser’s calculation of the value of your home at a given point in time. In order to get the approximate value of your home, the appraisal takes into consideration such things as:

Your home’s square footage
Construction quality
Home design
Your home’s floor plan
The neighborhood your home is located in
Availability of transportation, shopping and schools
Lot size, topography, view and landscaping

If you want to check out the tool got to this page. There are many different ways that you can raise your homes value but you may still be limited by the comparison factor. This is common practice and not much that a home buyer can do about that.

loumatt · #9 01-06-2011, 04:33 AM

Thanks so much for the useful info guys.

Whats so frustrating is after a lot of time and effort hearing people coming into our flip and telling me not to make it nice ie...leave the cracked up driveway,dont replace the old beat up and outdated doors,don't fix this and don't fix that, or my favorite just put a fresh coat of paint and put it back on the market.

I thought the word home improvement meant just that and not try to put off the misery of these future repairs on your buyer.To me it seems a house will sit forever if there are unresolved issues unless your giving it away.

Our realtor as well as a accountant seemed to think it's foolish to try to improve the property totally thinking it won't appraise but yet the highest comps in the area (some over 6 months old unfortunatly) show the houses that have been completly gone through have brought the kind of money we would like to see.

Whats funny is when I ask the realtor why these fixed up homes have sold for far more than what he says they will appraise for I get no solid answer on how this can be.

There are quite a few homes that are comperable on the same street that are just beautiful and even one that isn't (no updating) that sold for far more than what he says we'll get.

Well i guess I'll just have to follow my heart and do the best I can and see what happens in this crazy market that seems to stay stagnant with this formula.

Again thanks so much and please excuse the length of this rant (just great to hear from some that understands).

Best regards

badmomma · #10 01-07-2011, 11:41 PM

Your quite welcome and your right no one is going to want to pay top dollar for something they are going to have to fix up. I don't mind some minor repairs but am put off by major fixes.

When I am ready to buy a new home I will be looking for modern and convienient and ready to live in. I won't want to have to replace all the flooring and repair the walls. I just want to move in and start over.