Tag Archive for: comparable sales

6 Things That Terrify Appraisers

Here are a few things that really scare appraisers. 1. Unusual Properties. Unusual properties include those with acreages, odd structures (e.g. a round house), multiple dwellings on one lot, adverse influences such as a nearby freeway, easements that clearly affect value, income properties (two to four units), over-improvements, unfinished structures, significant deferred maintenance, and unclear […]Read More

Appraisers Can’t Ignore “Bad” Comparable Sales; Agents Shouldn’t Either

AGENTS WERE LIVID WHEN APPRAISAL CAME IN LOW We recently had an appraisal come in $25,000 under contract price – and the agents were irate! They sent us comps that they insisted the appraiser should correlate to – but: (1) the comps were in another development a few miles away; and (2) the comps were […]Read More

Appraisers Can’t Ignore Low Comparable Sales; Agents Should Not Either

APPRAISALS COMING IN UNDER CONTRACT PRICE B/C MARKET’S SO HOT We are seeing appraisals come in under contract price more frequently than normal again b/c the market is so hot and buyers are bidding so aggressively. This is not b/c our appraisers are not trying to support contract price; it is b/c appraisers simply lack […]Read More

Comparable Sales Appraisers Can’t Use; Appraisal Reviews

Hot markets foster appraisal issues – every time. This is b/c aggressive buyers in multiple bid situations frequently offer to pay far more for a property than what closed comparable sales can support in an appraisal. If buyers have ample cash, low appraisals are often not an issue, as buyers can simply bring in cash […]Read More

Why Agents Need to Share Low Comps Too; When Cat Pee Matters :)

Agents often share relevant comparable sales data with appraisers to help support value. B/c of this we often share basic appraisal guidelines with agents to ensure they share comps that appraisers can actually use. Comparable Sales Appraisers Can and Can’t Use is just one example from a past blog. Comps can’t be too large, too […]Read More

Why Appraisers Can’t Ignore Comps That Hurt Value

The 1990s were good and bad for appraisers. They were bad b/c appraisers had to use analog sources (books and printouts) to find comparable sales; they were not online. They also had to take analog photos and glue them to old fashioned paper reports. The 1990s were good for appraisers b/c there were no appraisal […]Read More

Why Friendly Appraisers Should NOT Push Values Too Far; Review Appraisers Are Like Sharks

$125,000 APPRAISAL CUT KILLS DEAL Several years ago, we had a $700,000 purchase of a property with an unpermitted in-law unit in Concord, CA (very common in both our Bay Area and Austin markets). There was 1,600 square feet of permitted (legal) space and an additional 800 square feet of unpermitted space (the in-law unit). […]Read More

Comparable Sales Appraisers Can and CAN’T Use

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When “Appraised” Value Is NOT Market Value

Because the market is heating up again, we have had several appraisal issues recently where there were simply no comparable sales available to support the contract price (despite multiple offers at that price). Because the agents involved in the transactions were frustrated, I thought it was necessary to repeat this blog. TEN OFFERS OVER $1 […]Read More

Delay The Appraisal Inspection If Pendings Closing Soon

Appraisers cannot correlate to any comparable sales that close after the appraisal date (the date of inspection). In “hot markets” this is a very important consideration b/c the necessary comps are often pending. Appraisal inspections should be delayed until after necessary pending sales close. If an appraisal comes in low and a higher priced pending […]Read More

Comps Must Be Within 20% of Size of Subject; Comp Criteria

This is a reminder that Comparable Sales in appraisal reports must be within 20% of the size of the subject property (in most cases). Hence, a 1,500 square foot house requires comps between 1,200 square feet and 1,800 square feet. We often get comps that we cannot use b/c they are way too big or […]Read More

Appraised Value Is Not Market Value; Solution?

We have a transaction in which two buyers (both are clients of ours) are more than willing to pay $1.2 million for a property in Oakland with an appraised value of only $950,000. There are probably more buyers in the wings willing to pay a similar price. The appraisal came in so low b/c of […]Read More