Tag Archive for: market value

No Appraisals For Loans Under $400,000; “New Home Premium;” Appraised Value’s Not Market Value

I want to share a few more interesting comments about appraisals today. On Wednesday I blogged about how appraisers can’t ignore comps that don’t support value. The agents wanted us to use dated comps and ignore more recent comps, but appraisers of course can’t do that b/c underwriters and reviewers will see the ignored comps […]Read More

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

Appraised Value Often Does Not Equal Market Value

I share this story often during our Mortgage 101 Seminars. We once had a transaction in Berkeley involving a property that was listed for $850,000, and there were more than ten offers for over $1 million. The market value for that property was clearly over $1 million b/c there were so many buyers willing to […]Read More

Paying More Than Appraised Value? Why? Appraisal Not Market Value

Several realtors have asked why borrowers are willing to pay over appraised value. There are several reasons that we have observed: (1) the buyer is a 27 year old social media employee with $11 million in stock options, and money is not a significant concern; (2) the buyer is getting a massive gift from relatives, […]Read More

Appraised Value Often Not Market Value; Happy Thanksgiving!

This is a reminder that appraised values often do not reflect market values. Appraisers are trained to make a concerted effort to correlate to contract price whenever there is a wide range of adjusted values. In addition, appraisers are severely constrained by appraisal and underwriting guidelines. We see extreme examples of this in very hot […]Read More

Why Appraisals Do NOT Reflect Market Values In Hot Markets

Appraised Values often do not reflect market values. We address this often b/c there is so much confusion about this in the overheated California housing markets. The reason is that appraisal guidelines force appraisers to only use “closed” comparable sales. Appraisers cannot correlate to offers or pending sales. In a quickly appreciating market, closed sale […]Read More