Appraising a Home In a New Build Subdivision

"Right off the bat" I'm going to say I'm NOT an appraiser, but have a little bit of bones to pick. Talking to a new client today, I heard some unsatisfactory news. My new client is trying to refinance their house they bought only a little over a year ago. They bought the house grand brand spanking new, and it was one of the first homes built in the division. Since then, there has been numerous homes sold in this division from the same builder, with the same upgrades, similar square footage, and all the other things that tag properties as comparable to this one. My client had an appraiser appraise the home, and the value came back much less than what she bought it for. I call the builder, the owner of the company, and he tells me that there is plenty of homes that are selling in that subdivision that are comparable and selling for more than she paid for her's, in relation to dollar per square foot. I've never appraised a home, but I have done my due diligence in trying to ask experience appraisers the right questions during my time in this business so I can hold intelligent conversations at the coffee table. My understanding is that when a home is being appraised in a new build subdivision, the recent sales many times are not listed on the MLS or Multiple Listing Service that Realtors list homes on and the appraiser won't find newly sold homes in their system because they don't register. So, an appraiser must contact the area builder in that subdivision and request a list of comparable homes to be included in his appraisal. Talking about someone not having pride in their work. It is really disappointing to know that an appraiser in this market is taking clients' money for an appraisal and his service to them is not worth one penny they give him. This appraiser was referred by her current lender. Does the lender not want her to refinance and pay them off because they know that they are going to make less money on a refinance to a lower interest rate, or does the lender even know that the appraiser lacks the pride and motivation to produce credible and quality work? Are you getting the value you desire?

This is why you need to research the lender, realtor, or builder you decide to use before you hire them for their work. Don't forget to interview and research a little, or at least, ask friends, family, or coworkers for a referral when making big money decisions.

Mortgage Lender Fall Out, and Why

Wow! What a ride! It's been months and months now, and just when you think the smoldering has ceased, another lender goes down in flames. Our company immediately stepped back and evaluated our company and its ability and risk to survive where we currently stood back just over a year ago. We decided to take a business venture just before the real "stuff" hit the fan. Our business never changed, and any borrower or client using our services would not have been able to notice a single skip in our step. After pushing hard and settling down in our new home, wholesalers began their demise. The foreclosure market hit and lenders saw profits drop into losses. Underwriting tightened, and secondary markets refused loans from wholesalers to the extent that the "wholesale lines" backed up with loans that couldn't be sold. After enough loans sit on those credit lines, it becomes a risk for the owners of those lines to continue allowing the wholesalers or correspondent broker companies fund with those moneys. So, they cut them off. In our new company, we saw very similar situations, so we backed out and got back into the world we started to re-evaluate our options. Here we stand, but not for long. If you would like to see the lending companies that have closed shop click on the this text. Anyway, in case you were wondering the direct cause of some of the fall out, that should brief you.