Home appraisals no longer derailing sales.
NEW YORK (CNNMoney)
Consider this one more sign that the housing market is heating up: Appraisers are putting higher values on homes again, allowing for more deals to go through. During the housing bust, sales were often derailed by low-ball appraisals that fell far shy of a home’s selling price. For example, if a home cost $500,000 and required a 20% down payment of $100,000, the buyer would need to finance $400,000. But if the appraiser valued the home at $450,000, the buyer would only be eligible for a $360,000 loan — making the home too costly for some buyers.
But now, as home prices climb and housing inventories shrink, appraisers are valuing homes at or above their selling prices, according to Lawrence Yun, chief economist for the National Association of Realtors. Between 2008 and 2010, appraisals for more than a third of Seattle-based real estate agent Michael Ackerman’s sales came in below the selling price. So he had to get creative.
“I started pulling out the key boxes at the homes so the appraisers couldn’t get in,” said Ackerman. “They had to call me to let them see the home. I would bring a packet of comparables along and explain what I used to price the home.”
But now, with home prices posting such strong gains, those strategies may not be necessary anymore. “I’ve closed 15 homes so far this year and none of the appraisals have come in below the selling price,” said Ackerman. He was certain a recent deal in Wallingford, Wash. was going to fall through when the buyer agreed to pay $755,000 — well above the average $690,000 other homes in the area had sold for. When the appraisal came in at the full selling price “everybody’s jaws dropped,” he said.
And in some of the hottest markets, appraisals are coming in well above the selling price.
Agent Eric Tan said one appraiser did a “drive-by” of a West Covina, Calif., home he was selling in April. “He didn’t ask for any comps, to see the inside of the house, or even schedule a time to meet with me. He wrote up the appraisal right at the purchase price,” he said. “I was able to sell the client’s home for about $40,000 more than I thought the appraiser would value it.” In Jacksonville Beach, Fla., where prices have soared 15% over the past 12 months, agent Cara Ameer was “holding her breath” when it came time to get an appraisal on a two-bedroom townhouse she sold for $5,000 more than its $189,000 asking price.
“It was FHA financing and [the FHA is] typically much more strict,” she said. That appraisal too ended up coming in above the selling price.
Source: CNN Money
Fountain Valley Summerfest June 28-June 30!!
The Fountain Valley Summerfest Committee, in partnership with the City of Fountain Valley is launching its 5th annual community celebration called “Fountain Valley Summerfest” to be held last weekend of June 2013 at the Fountain Valley Sports Park at Brookhurst and Heil. This 4-day celebration will include carnival rides, food and beverage booths, game booths, local entertainment, exhibitors, non-profit organizations, live music, beer/wine garden, Live Sports Tent, the Fountain Valley Classic Car & Truck Show, and the Dog Day Afternoon event.
http://fountainvalley.org/community/communityservices/Summerfest.php
* Preview Night, Thursday June 27, kicks off the weekend long event by opening many of the activities a night early so people can see what is to come. All rides on Thursday night will be just $1 per ride. We will also have the beer/wine/margarita garden open and music. Test your skills at the many carnival games that will be operating and treat yourself to one of the many gourmet food trucks that will be onsite Thursday night.