Home Prices Being Held Down by Appraisers & Mortgage Underwriters

Collier Swecker video blogs about how real estate agents in Alabama are having trouble selling homes at prices that ready, willing and able buyers are willing to pay. We have found that as the listing inventory in the Birmingham market decreases, demand for good housing has increased and so has the contract prices real estate agents are able to procure for their sellers. The only problem is that appraisers and mortgage underwriters have become so conservative that it seems that what a willing buyer is offering to pay for a home has become nearly irrelevant. I think that in many ways appraisers and mortgage underwriters forget that buyers essentially make the market. Any meaningful increase in home prices will only come once appraisers acknowledge that the market forces of supply and demand are forcing prices higher. Additionally, it is funny that mortgage underwriters agree with the appraisers 100% of the time when an appraisal is below contract price but often challenge the validity of appraisals when a home is valued at or above contract price. If you have any questions or comments email me at Collier@MegaAgents.com, visit my blog at www.CollierSwecker.com or my website at www.MegaAgents.com.

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Do Appraisers Consider Short Sales and Foreclosures When Appraising Your Home

Collier Swecker video blogs an answer to the frequently asked question about whether appraisers in today’s real estate market are using foreclosures and short sale homes as comparables when arriving at the fair market value of non distressed homes. In the good ole days of the mid 2000’s there were not as many distressed properties and there were plenty of normal resale homes for appraisers to use in your neighborhood as comparables to justify your homes value. To illustrate why appraisers have to consider distressed properties, consider that the ratio of actual homes listed that were in some form distress (short sale, reo, or foreclosure) in January 2012 was around 18% of all homes listed for sale in the Birmingham MLS, while the number of distressed homes that actually sold in January 2012 was much higher at around 43% of all homes sold. During those good ole days that percentage of distressed homes that sold monthly usually ran well below 10% of all sales. This rise in the ratio of distressed homes to non-distressed sold properties has forced appraisers to arrive at values that unfortunately accurately reflect what is going on in the market. They simply cannot ignore these distressed properties when they account for nearly half of all sales. If you have any comments or questions, email Collier at Collier@MegaAgents.com or visit my website at www.CollierSwecker.com.

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Pre Listing Appraisals More Important Than Ever

Collier Swecker video blogs about how appraisers are fast becoming the most pivotal player in real estate transactions in this late Summer 2011, Birmingham Real Estate Market. Our team is finding that nearly 2 out of every 10 transactions that we are involved with are having Appraisal issues where the Seller has no choice but to lower the contract price or lose the deal all together. You would think that our marketing generating a high offer would be great, but it is not good if the home cannot close and a Seller cannot get paid! We are strongly encouraging that our Seller clients get Pre-Listing Appraisals. Having a Pre-Listing Appraisal will give the Seller and the Realtor insight as to how the property will fare when the contract appraisal is performed and can be used as a valuable sales tool to show potential Buyers that they will have instant equity in the property and that the Seller has done their homework in pricing the home. We actually attribute one of our June 2011 sales directly to the use of the Pre-Listing Appraisal to encourage a Buyer to accept the offer from my Seller. If you have any comments or questions, email Collier at Collier@MegaAgentRealEstate.com or visit my website at www.MegaAgents.com.

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Sellers Have to Sell Their Home Twice in This Market

Collier Swecker video blogs about how in this real estate market, Sellers have to sell their home twice! Once to a buyer and then again to the appraiser for the buyer’s mortgage lender. According to the National Association of Realtors, nearly 25% of all contracts on residential homes had either the contract fall thru because of low appraisal or the sales price of the home had to be lowered. If you have any comments or questions about making sure your home is sold to both a buyer and an appraiser email me at Collier@MegaAgentRealEstate.com or visit my website at www.MegaAgents.com.

Do Not Use Jefferson County Alabama Tax Appraisals to Find Your Homes True Value

Collier Swecker video blogs about how homeowners in the Birmingham AL area do not need to use Jefferson County property tax appraisals as an indication of their homes actual retail value. A Sunday, June 27, 2010 article in The Birmingham News seemed to imply that property values as appraised by the Jefferson County Tax Appraiser were arrived at via methods similar to those of a Realtor or Real Estate Appraiser. This couldn’t be farther from the truth. Jefferson County has no incentive to be accurate in this economic climate of declining real estate prices. As an example, just last night I was reviewing sales numbers for homes in Vestavia Hills that have sold in the past 3 years over $500,000. What I found is not consistent with the appraisals performed by Jefferson County. These homes on average, saw a decline in average sales price of nearly 8 percent year over year. I know this is not good news if this affects your home, but this is real sales data that must be considered if you want to arrive at what your home is worth to potential buyers at this given time. The Birmingham News needs to be sure not to imply, as they strongly did in their article, that the public should rely on Jefferson County tax appraisals for any purpose other than figuring out how much property tax they owe. While the Birmingham area has not been hit with double-digit declines to the degree of areas like Phoenix, Las Vegas and South Florida, our market is showing signs of rapidly decreasing sales prices across the board. Of course that means that it is a great time to buy a home! If you have any comments or questions about finding your homes true value, email me at Collier@MegaAgentRealEstate.com or visit my website at www.MegaAgentRealEstate.com.