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If you seek to borrow money from an institutional lender such as a bank to purchase your new home, you can be sure of at least two things: mounds of completed paperwork and a visit by an appraiser to your intended property.
It is the appraiser’s job to determine whether the apartment or single-family house provides enough collateral to back up the loan in the event of default. As we all know, when the value declines below the value of the loan, the homeowner is said to be underwater, owing more than the property is worth.
That’s not a happy situation either for the lender or the owner.
Appraisers note Continue reading
Auction aficionados are well aware that each of the public administrators in the city’s boroughs holds auctions usually three or four times a year to unload properties of owners who died without a will.
Every time I publish a post about an upcoming auction along with the minimum bids, I can count on Internet chatter to the effect that the apartments and townhouses going on the block don’t add up to bargains. To commenters, the minimum bids invariably seem too high.
I got to wondering how the public administrators decide on the minimum. Continue reading
According to the National Association of Home Builders (NAHB), it’s not the economy, stupid. It’s not those avaricious lenders of sub-prime loans to unqualified buyers. It’s not exotic hedge funds. Nor is it government regulators.
No, it’s. . . appraisers!
Get this from an NAHB press release this week (and just wait until you read the last paragraph of the release, in boldface way below):
“Using foreclosed and distressed sales as comparables with appraisals on single-family homes without adequately reflecting the differences in the condition of the respective properties is needlessly driving down home values.”
That’s the lead paragraph. The release then quotes its chairman of the board, whose photo is below. Says Joe Robson, a home builder from Tulsa, Okla.:
“Any home buyer can recognize the difference between a well-kept home and a distressed property that is damaged or not properly maintained. So it only makes sense that an appraiser should be required to consider the overall condition of a property and the specific factors related to a foreclosure or distressed property sale when selecting and adjusting the value of comparables.”
If you are buying or selling real estate, this is an issue that you’ll discover runs close to home. One reason Continue reading