Concessions, credits, multiple offers, appraisal or not… I appreciate understanding all the layers that might help tell the story of the property. In my mind I’m a fan of more data to help understand a transaction and the terms of it. Just because there weren’t multiple offers doesn’t mean the appraiser will give less weight to the sale or pending. I find something similar hopefully happens with the other fields. I get your concern and I hope appraisers wouldn’t look past comps as such. I’d love to hear other opinions here too. If you liked this post, subscribe by email (or RSS). Thanks for being here. Questions: What is the sixth thing to remember about low appraisals? Any stories to share? Any thoughts on rent control or the weed dynamic right now? My goal is for everyone to walk away with an understanding of how the market is moving, ways to describe it, and some ideas for business in 2020.
Quicken loans horror stories update#
What are the positives and negatives of this type of enforcement for the housing market? How will this affect investors?īIG MARKET UPDATE: I’ll be giving a deep market update at SAR on September 24th from 10:30-12:00pm. I’ll let lawyers figure out if this is legal or not, but from a market perspective this is something to watch. The author of the piece states the City of Sacramento has issued almost $100M in penalties over the past two years. We’re talking big money too as the story highlights an example of a $137,000 fine. Landlords getting huge weed fines: There was an illuminating piece by Capital Public Radio on Sacramento fining landlords when tenants turn rentals into “grow” houses. My advice? Be careful with assertions about market rent. Remember, rent control does not apply to single family homes. Gone are the days of saying things like, “Rents are below market and you can raise them to X amount after buying.” The problem is market rent isn’t so straightforward any longer because not all units can be legally rented at the same level. Secondly, rent control will change the way properties are advertised. The temptation is to look for an immediate impact, but we might need years to fully understand the effects. One, rent control is a huge deal, but we’re going to need some time to really understand the fine print as well as its effect on the housing market. In the meantime, here are two quick thoughts. We’ll talk through rent control dynamics and some things to consider for value. Rent control: I have an upcoming interview about rent control with an appraiser colleague in the Bay Area (and I’ll likely do others too). Note to appraisers: I know this post will not sit well with some colleagues, but this is a part of the business and my goal here is to elevate the conversation (and hopefully only see rebuttals when they need to happen). In fact, here’s some tips and a form I suggest using if the lender will allow it (otherwise you’ll need to use the lender’s form). I don’t think any appraiser looks forward to this, but it’s part of the business, which is why I advocate for data-informed conversations and ethical protocol. When this happens it’s reasonable to go through the lender’s process of asking the appraiser to reconsider the value. I’m not glossing over that frustration and I realize there are horror stories out there. Appraisers have an important role to play in the market and if they’re doing their job correctly it won’t always lead to smooth escrows.īotched appraisals and what to do: Of course we don’t live in a perfect world and appraisers legitimately miss value at times. I know this sounds a bit Pollyanna to say, but I’d like to see the real estate community view appraisals this way instead of thinking appraisers should “hit the number” all the time. So when an appraisal comes in lower than the contract price, it’s often treated like a grave market sin when in fact this should be something that happens from time to time. But it seems like the residue of that expectation still exists today. The problem: During the housing “bubble” we expected appraisers to always “meet value” so to speak. Then I have some quick thoughts on weed and rent control.ĥ things to remember about “low” appraisals:Ģ) This is even more common in a declining market.ģ) It should happen if the contract is too high.Ĥ) It can spur negotiation instead of kill a deal.ĥ) The value of course is too low sometimes. Is something in the water? What’s going on? Let’s talk about this briefly.
I’ve been getting lots of phone calls and emails about low appraisals over the past couple months.
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