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Archive for the ‘Appraisals’ Category

Why Zillow is a Good Thing

They are well optimized so my listings get good exposure.

And their Zestimates are SOOOOOOO wrong!!

The first is a no brainer. Free exposure with a pretty decent format. My listings are attractively displayed with multiple photos and a good description. I can edit the photos and text, and it allows me to link a virtual tour.

Many agents belly ache that we are giving our listing data over too easily just for Zillow to sell leads to other agents. This is true, but there is nothing I can do about that. Most sellers would not be happy if I excluded Zillow from displaying their listing. And I don’t blame them. So for now I take the free advertising.

Many agents have also been whining lately about the inaccuracy of Zillow’s Zestimates or estimated house values. And they are correct. Most of the estimated home values on Zillow are crap. From my perspective this is a good thing. It bolsters my belief that sellers and buyers still need us. If a computer program can accurately price a home, it greatly reduces the need for real estate agents and appraisers.

So in my mind Zillow is a good thing- further proof for the need of a real estate professional and free advertising on a highly ranked web site.

Thinking of Selling

Thinking of Buying

www.Search-The-MLS.net

Jackie Hawley, Realtor

ReMax Encore

Cell: (248)736-6407

www.MiRelocation.com 

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Is the Appraisal for Your Protection? Oakland County MI Real Estate Home Sales

When buying a home in Oakland County Michigan a standard contingency is financing (the buyer obtaining a mortgage for the house). Normally, part of the financing process is an appraisal, and the cost of the appraisal is born by the purchaser.

  • So is this the purchaser’s appraisal?
  • And is the appraisal for the protection of the purchaser?

The answers are no and no.

If it really was the buyer’s appraisal, the buyer would get a say in who the appraiser is. Or at least the buyer’s loan officer would get a say.

Loans mortgage appraisalsThe appraisal is for the protection of the lender. The lender loans money to a purchaser, and that money is secured by the house and, rightfully, the lender wants to make sure the value is there.

Because of some of the asinine changes in the mortgage process over the past few years, the loan officer is no longer able to hire, or even speak to, the appraiser. The lender (loan officer) contacts an appraisal management company who then assigns an appraiser. And like in anything in life, there are good and bad appraisers.

So you the consumer can interview and choose the best real estate agent to work with. Interview and choose the best loan officer to work with, choose the best home inspector, best insurance agent, best title company … But no say on who appraises the home you are trying to buy.

Appraisers themselves are finding themselves under scrutiny because some want to blame them for the housing mess we are currently in. And the result has been overly cautious appraisers. And many inconsistencies in appraisals.

I’ve had multiple appraisals on the same house come in as much as $100K+ apart. Another one where 2 appraisers for the same house within a week of each other came in $74K apart.

I had another sale where I was on the listing end (a short sale) and it was another property with multiple appraisals. Between the buyer and the lien holders there was a total of 5 appraisals. 5 appraisers came in with 5 different values.

horse racing first and last equalOne of the main problems I’m seeing on the appraisals is the appraisers aren’t giving value for quality. Everything is size and location with very few adjustments, and those adjustments are for things like walk out basement vs standard basement. Maybe a few thousand for a finished basement vs an unfinished basement. If the comparable sales are in the same sub you may see an adjustment for location within the sub.

I’m not seeing credit given for quality. Top of the line Anderson or Pella windows will get zero value. Wood interior doors as opposed to the typical builder’s grade plastic feeling doors will get zero value. Upgraded cabinets, counters, light and plumbing fixtures will get ZERO value.

Now take 2 houses in the same or similar neighborhoods, and house a has builder grade everything and house b had the same floor plan built but upgraded everything mentioned above– should both those houses sell for the same price?

From a buyer perspective you may be thinking “Great! I can get $50K mattress money extra downpayment if house doesn't appraiseworth of upgrades for free.” Maybe not. You may find the perfect house and are willing and able to pay for quality. You spend $300+ on a home inspection. You spend $300+ on an appraisal, and the appraiser comes in $30K lower than the agreed upon price. The seller does not have to come down on price. If  the seller won’t come down, and if you still want the house, you would need to come up with the extra $30,000. If you don’t have it, you won’t get the house. You may have to settle for mediocrity in order to get a mortgage.

By the criteria many appraisers now feel they need to use, with the value determined solely by size and location, that is the same as saying the first place horse in the Kentucky Derby has the same value as the last place horse in the Kentucky Derby- all the same age, about the same height and all the same class of horse.

When I represent a buyer, I will perform a market analysis on the house you want to offer on. I will give you my opinion of value and back that opinion with comparable sales. I will also give my opinion on what I think the appraised value will be, and if there’s a difference, you will need to prepare yourself to possibly lose the house you want or pony up the difference. And if you are a person who feels that quality has value, be prepared to come up with additional down payment.

Hopefully this gives you a basic understanding about the appraisal process and value. If you have any questions or would like to see a copy of our purchase agreement, please don’t hesitate to call or email me.

My direct line at the office is 1-800-401-1444.

My cell number is 248-736-6407.

And my email address is Jackie@JackieHawley.com

Search the MLS

Homes for Sale in Oakland County MI
Homes for Sale in Clarkston MI
Homes for Sale in Lake Orion MI
Homes for Sale in Oxford MI
Homes for Sale in Waterford MI
Homes for Sale in Lapeer MI

www.MiRelocation.com

Preparing Your Home for Sale
Why List With Me

Marketing Your Home

Choosing a Buyer’s Agent

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I advertise my listings on Zillow- it’s a great site for my Oakland County home listings to get exposure. Zillow is one of several sites I advertise on.

Many of my Oakland County home buyers look for houses on Zillow and those same home buyers inevitably check the value of prospective homes with Zillow’s famous “zestimate.”

A zestimate basically takes the sale prices of homes in a certain radius and average the prices and calculate by price per square foot. Some may be on the water, some may be on main roads, some may be on acreage, foreclosures are included. It’s an average of ALL houses in the area.

As your Oakland County agent, I will advise you as to the value of any houses you consider making an offer on. I will give my opinion as to what I think it will appraise for and what I think market value is. The ultimate value is up to you.

I wish it was as easy averaging the sales within a half mile or mile and coming up with a price!

So you want to look at Oakland County MI homes on Zillow? Look away! But PLEASE ignore the zestimates!

Search the MLS

Oakland County MI Homes For Sale

What To Expect From Your Oakland County Buyer’s Agent

Financing and The Importance of a Pre-Approval

Jackie Hawley Realtor
ReMax Encore, Clarkston MI
Cell: (248)736-6407
Jackie@JackieHawley.com
www.MiRelocation.com

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The Appraisal Contingency as a Negotiating Tool- Southeast MI Home Purchase

There is so much more to writing an offer to purchase a home in Southeast MI than in days of yore. At one time pretty much price ruled. Strength of buyer was important, but not as much as today. Today there are many more factors to consider in a Southeast MI real estate transaction– is it a short sale, bank owned or good old fashioned non-distressed homeowner/seller?

You see more Southeast Michigan houses go pending then back on the market (sometimes this will happen multiple times with one house) than I ever remember seeing. Appraisals are coming in low causing the financing to fall apart. Short sales get denied. The list of reasons for dying sales can go on and on.

The more contingencies an offer has, the more chances the sale has to die. Low appraisals is probably one of the biggest reasons sales don’t close. No matter if buyer, seller and all agents involved know the house is worth every dime the buyer is paying and may even be a bit under priced, there is never a guarantee the house will appraise.

Where as one time the prime motivator was price, now removal of obstacles to closing have also become prime motivators. And the appraisal contingency is probably the biggest obstacle that can be removed.

I have used it to negotiate for the buyer in multiple offer situations. I have used it on the seller side to improve our chances to close. Often times a seller will take a slightly lower offer if the odds of closing are greatly increased. Of course cash negates the need for an appraisal. When a mortgage is involved, an appraisal is probably necessary. But if the buyer has the cash to pay the difference between the sale price and the appraised price, he can remove the appraisal contingency to make his offer stronger. Or remove it with limitations. Recently one of my buyers beat out another offer by agreeing to pay up to $10K difference on a low appraisal. So if the seller takes our $140K offer we would agree to close even if the house appraised at $130K.

With a lack of inventory, when you find the house you want, the goal is more to win and obtain that house as your new home. Until the inventory at least triples, getting the seller to come down on price will be a distant second to winning and getting the house you want.

Writing the Offer

More About Appraisals

The Home Inspection

Oakland County MI Homes for Sale

Search the MLS

Jackie Hawley, Realtor
Remax Encore
Cell: (248) 736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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Reasons Your Oakland County MI Appraisal May Come In Low

Low appraisals are probably the biggest killer of sales of non distressed homes in the North Oakland County area. There are many reasons for a low appraised value that have absolutely nothing to do with the actual value of the house being appraised. Below is a short list of reasons why a house may appraise low:

  • Lack of comparable sales
  • Out of the area appraiser
  • Bad appraiser
  • The amount of distressed sales in the area
  • Restrictions on adjustments

The problem with the list above is there isn’t much that can be done to change those scenarios.

Things to keep in mind if your appraisal comes in low:

  • The seller DOES NOT have to reduce their price to match the appraised value
  • Appraised value is just an opinion and does not necessarily reflect the true value of the house
  • The appraiser DOES NOT work for you
  • Your loan officer doesn’t really work for you. He/she has a duty to the lender/investor they sell the loan to
  • Appraised value and market value can be two totally different dollar amounts
  • Since about 20% of area sales are cash, market value will more than likely trump appraised value

Using the Appraisal Contingency as a Negotiating Tool

Search the MLS

Financing Your Next Home

Clarkston MI Homes for Sale

Lake Orion MI Homes for Sale

Jackie Hawley
ReMax Encore, Clarkston MI

(248) 736-6407

Jackie@JackieHawley.com

www.JHawleyAndAssociates.com

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If the appraisal is low the seller should come down? So if the appraisal is high the buyer should come up in price?

I recently had an appraisal come in low – way low- on a transaction where I represent the buyer. Way low translates into $74K low. The seller was asking $429,900. We negotiated a price of $404,000 and the appraisal came in at $330,000.

There are various reasons the first appraisal came in low but just trust me that the value was there and the buyers were getting a terrific deal. But the reasons for the low appraisal are not the subject of this post.

So my mom was at the bookstore during all this and was telling the lady there about the low appraisal and the book store lady immediately said “Of course the seller is coming down…”

But when someone brags that their new house appraised above the sale price nobody ever exclaims “So you increased your offer, right?”

Why is it assumed that a seller should give up thousands of dollars based on the opinion of one stranger?

What if the appraisal is low?

How the appraisal contingency can be used as a negotiating tool

Financing

How do the property taxes affect my purchasing power?

Who pays for the well and septic inspection?

Who is John Galt?

Buying a home in Southeast Michigan?

Jackie Hawley, Realtor
ReMax Encore, Clarkston MI
Cell: (248)736-6407

Jackie@JackieHawley.com

www.JHawleyAndAssociates.com

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There is so much more to writing an offer to purchase a home in Clarkston MI than in days of yore. At one time pretty much price ruled. Strength of buyer was important, but not as much as today. Today there are many more factors to consider in a Clarkston MI real estate transaction– is it a short sale, bank owned or good old fashioned non-distressed homeowner/seller?

You see more Clarkston houses go pending then back on the market (sometimes this will happen multiple times with one house) than I ever remember seeing. Appraisals are coming in low causing the financing to fall apart. Short sales get denied. The list of reasons for dying sales can go on and on.

The more contingencies an offer has, the more chances the sale has to die. Low appraisals is probably one of the biggest reasons sales don’t close. No matter if buyer, seller and all agents involved know the house is worth every dime the buyer is paying and may even be a bit under priced, there is never a guarantee the house will appraise.

Where as one time the prime motivator was price, now removal of obstacles to closing have also become prime motivators. And the appraisal contingency is probably the biggest obstacle that can be removed.

I have used it to negotiate for the buyer in multiple offer situations. I have used it on the seller side to improve our chances to close. Often times a seller will take a slightly lower offer if the odds of closing are greatly increased. Of course cash negates the need for an appraisal. When a mortgage is involved, an appraisal is probably necessary. But if the buyer has the cash to pay the difference between the sale price and the appraised price, he can remove the appraisal contingency to make his offer stronger. Or remove it with limitations. Recently one of my buyers beat out another offer by agreeing to pay up to $10K difference on a low appraisal. So if the seller takes our $140K offer we would agree to close even if the house appraised at $130K.

With a lack of inventory, when you find the house you want, the goal is more to win and obtain that house as your new home. Until the inventory at least triples, getting the seller to come down on price will be a distant second to winning and getting the house you want.

Writing the Offer

More About Appraisals

The Home Inspection

Clarkston MI Homes for Sale

Search the MLS

Jackie Hawley, Realtor
ReMax Encore, Clarkston
Cell: (248)736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

Read Full Post »

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