Your Home May Not Be Worth the Appraised Value, Wait Until You Read This
Posted on | January 6, 2009 | 11 Comments
The number of mortgage applications has been up seemingly every week since late November. While there may be some swayed statistics in these reports, we do know that mortgage applications are up when compared to the summer and fall months of last year. The first step in the mortgage application and refinancing process is to get an appraised value on your current home. Most Americans have an appraisal value that they have been quoted recently, some not so recent. What most homeowners do not realize is that their lender is likely to find out that the CURRENT appraised value is actually much less then what you may think it is.
Appraisers are seeing homes in many markets that have declined over 50% in the last three years and are reluctant to appraise the home at a value that the homeowner believes to be the true value of the home. Homeowners need to be honest with themselves when they are analyzing the value of their homes. If they live in a neighborhood in which five homes have been on the market for over a year and have not sold, it is likely that the value of their home is not what they would like it to be.
All of the Real Estate Owned (REO) sales and foreclosures have put a damper on many home values. Sadly, if your neighbors were not smart with their money and were forced to have their home foreclosed, the value of your home has GREATLY decreased. While we may not enjoy this and we hope it is not the case, it is. There have been many readers who have stated that the foreclosures in their neighborhoods have greatly decreased the value of their homes. Not every market is the same, but many United States market are seeing this trend and do not be surprised if it is happening in your hometown as well.
Ultimately, we are all blind to things important to us whether it be children, family or financial information. Please be objective and realize that the value of your home may not be worth as much as you think it is which will ultimately trouble you in the mortgage application process.
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11 Responses to “Your Home May Not Be Worth the Appraised Value, Wait Until You Read This”
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January 7th, 2009 @ 10:35 am
Great article i try to explain
PREACH to ignorant homeowners and local realtors in central florida that this is the truth. Realtors are not giving honest facts to their sellers they are in denial or mis informed by their brokers so sellers are not selling realtors are putting price tags that are so off by what todays market truly is.it is ashame to all of the americans who hire a realtor to sell their home and all they become is another inventoried home sitting on the market forever. for example a home in 2004 priced and sold for 800 k r will sell today for 380 if your lucky enough to find one a bank to loan to buyer and if you find that buyer there are so many homes and deals and their will be even more deals in the next 2 years we are not dont yet so offer 60-80% less than what seller thinks their home is worth ….Good Luck
January 7th, 2009 @ 10:38 am
oh and if seller stay ignorant to the fact wait till the bank evicts them and you will pick it up for a definate 60% off shop smart
January 7th, 2009 @ 10:39 am
After i posted my blogs i am sure realtors brokers will come to blog in offense for their lack of knowledge but it is a fact i seen this coming your average american family had to wait 15 – 25 years to see double equity in their home and all of the sudden you buy now and next 6 months your home tripled this was a scam for the history books
January 7th, 2009 @ 10:41 am
anyone can really own a mansion now look like a million bucks but worth 250 grand wake up america sell smart shop smart
January 7th, 2009 @ 11:03 am
Man as an investor I have experienced this. I had a house that was appriased at 118k and the bank cut it in half. I lost 50% of the value due to and most likely because of all the REO sales in the area.
Now Im stuck with trying to find a private lender.
Definitely have to do your homework.
January 7th, 2009 @ 4:48 pm
The people doing the appraising are killing the market. You cannot give a value for a house that is less than what you can build it for, and that is happening every day.If you factor land cost, impact fees, taxes, construction loan interest, material, and labor cost to build a home that is the true minimum value -IF YOU BUILD IT. Most times you must pay someone to build it. The appraisers that set a value at less than that point are actually lieing. This lie will keep that house from being built or sold. So lets point fingers at where they need to be pointed. The lending institutions that are seeing these figures should ban these appraisers from working for them. Loans should be set from figures submitted by builders, not idiots that have no clue about true cost.
January 7th, 2009 @ 5:14 pm
What amazes me is that some buyers in my neighborhood, Baldwin Park, are still paying retail when buying from the builders that remain here, not many left. Yet the banks are short selling for less than half the value, but the property appraiser does not reflect these short sales for half the value. Appraisers belong in jail for allowing this to happen. The new buyers in 2009 are getting screwed.
January 7th, 2009 @ 5:32 pm
Lee,
What it costs to build a home in today’s market(including land price) is the upper limit of value. What buyers are willing to pay for them is the value, no matter how much they cost to build.
January 7th, 2009 @ 5:42 pm
Lee, you need a reality check if you think lending institutions should rely on building contractors to set loan amounts. Appraisers have standard cost guidelines to follow, builders do not. Builders are in the business to make money. The appraisers job is to gather market information, analyze it and estimate the current fair market value. Think of it this way; you might agree to pay 600K to have your home built and your neighbor builds an identical home for 400K. Does that mean your house is worth 200K more, maybe not. Buyers set the limits on the market, appraisers do the research, break it down and report their findings to their client. For what its worth…I hope this helped!
January 7th, 2009 @ 7:14 pm
[...] Your Home May Not Be Worth the Appraised Value, Wait Until You Read This [...]
January 14th, 2009 @ 11:43 pm
[...] Financing subprime mortgages is something that many Americans are currently dealing with. The major problem is that financing subprime loans is extremely difficult with the economy in a recession. If an individual did not have great credit during the housing bubble, it is HIGHLY unlikely that their credit has improved anytime since then. With unemployment on the rise, it does not look like it is going to get any easier when financing subprime loans. [...]