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Low Appraisals, An Ass-inine Battle

This may or may not turn into a rant, so let me apologize in advance. Right now, I am seething.

Appraisals. We are not stupid people, nor do we work with stupid people. (Well, occasionally *one gets through). We are very careful about advising our clients regarding value and cautioning when a property seems overpriced. We know our stuff.

Just today I am dealing with 3 appraisals which came in under value. They are in vastly different areas of Oakland county and different price points. Let’s talk about the one in particular, shall we? I sold it for roughly $285k, clean, 20% down payment, conventional mortgage. I received a call from the appraiser today, stating he “thinks” he can get the value up to $252k. That was when I knew *one had gotten through.

“Wait. Really?” I said. “Because I provided FOUR published sold comps, all smaller than ours, which should support value just fine.” Then, he informs me that he is unable to use those comparables because they are “more than 90 days old, and the lender wants comps that have sold within 90 days.” 90 days? ARE YOU KIDDING ME?

When will this appraisal madness stop? Let’s revisit the last 90 days in Michigan shall we?

90 days ago would be January 28, 2014…

According to the weather historian, on January 28, 2014, we already had approximately 4 FEET of snow with a fresh 14 inches dumped on us in a winter storm that sealed us in our houses tighter than a Ziplock baggie; not to mention the sub-zero temperatures that lasted for WEEKS here in southeast Michigan. You lived through it, you know.

You know who was out buying a home? NOBODY. Our snow finally melted two weeks ago and our spring market has just begun to recover. We know that guidelines allow appraisers to go back 120 days and as much as 365 if they have difficulty finding comparables. I  am not asking that he accept comparables outside of 365 days, nor am I reaching for area. They are in the same subdivision for crying out loud.

I do not understand their refusal to do so in an effort to support value that the buyer and seller agree upon and two agents support it! They have four comparables in their hands of homes that support value. They are older than 90 days, closed prior to Michigan migrating beyond the polar ice cap! THERE ARE NO 90-DAY COMPS, *JA! (Don’t make me explain that.)

I am sick to death of this market being dictated by the media or the lenders: “Everybody, run! Hurry up and buy, the market is going up!” or “Everybody, run! Hurry up and sell, the market is going into a dive!” Just stop it.

And the lenders…ha! First you they want to loan you 125% of the value of your home, because it’s a good investment and now you can’t even get a loan for 80% of value. The pendulum hasn’t swung in the bank’s direction my friends, the pendulum is broken.

Buyers are at the complete mercy of the lenders. They keep their credit clean, save their money, get pre-approval, finally find the right house and some guy with a #5 red pencil decides that TODAY we can only take comps 90 days old. Know what? STUFF IT guy with the #5 red pencil.

Let me tell you how this deal is going down. We will kill this deal. You will not make the loan. Your buyer will not get their dream house. My seller clients will resell it to another buyer just so we can get a reasonable appraisal next time.

Congratulations, *JA.

p.s. Correct grammar and punctuation are not required in a rant. Especially, when one is in a hurry.


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