Mermin inspections Blog

The Apraisers Corner

The Appraiser’s Corner: Heidi Slusarski

Thursday, September 3rd, 2009
What Are We ALL Thinking!  Order Your Own Appraisal!  Who Are You Trusting With Your Dream?
Appraiser’s are a very important part of the process if they do the job they are supposed to.  For some reason everyone has come to believe that the Appraiser is there to tell everyone that the property is worth whatever they want it to be.  Even the Appraiser.  Jaded by selective ignorance and greed, everyone wants something done their way.  The Realtor wants the property to be worth more when the offer is higher and less when they are trying to explain to the bank that it needs to be listed low for a quick sale.  This can often occur in the same transaction.  First they need it low with all of the damages listed to convince the bank that it is going to be hard to sell.  Then when an offer comes in, they do not want any damages listed, because the bank will not finance it.  The customer wants the house to be worth whatever will get him the beautiful new dream home he has his heart set on.  The mortgage broker wants the house to be worth whatever will get the loan through and the Appraiser who is not supposed to want anything, wants to make everyone happy.  The value is the value.  The Appraised Value is simple and should be based on similarly marketable comparable sales, market trends and active listings.  This often brings a great deal of confusion to us all.  First of all, now that the Short Sale has caught on, it is fun to list everything for $30,000-$40,000 and see how high it will go knowing full well that the Seller will never take an offer that low.  Which pretty much renders the MLS useless these days to gage active listing activity.  Then, we have the problem with the definition of comparable.  Comparable generally requires the property to be somewhat similar.  A comparable sale does not mean that your house has a residential view in a typical neighborhood and we call the home in the gated community on the golf course or sitting on the Gulf of Mexico a comparable sale.  Comparable means a home of similar size, condition, design, view and location.  Homes that one buyer may consider as an option when shopping.  People who want to live in a log cabin home on 20 acres of land are not going to look at a concrete block home on 1/10th of an acre of land in a deed restricted neighborhood.  Buyers looking for saltwater access location homes are not going to consider paying the same price for fresh water homes.  More confusion is created when the bank tells the borrower to pay for the appraisal.  The bank owns the appraisal, whether you pay for it or not.  The appraiser cannot discuss the appraisal, the results, or anything pertaining to the appraisal unless you order the report directly.  Although the report cannot be used for anything other than your purpose of estimating the market value, $200-$400 is not alot to pay to insure your peace of mind and that you are not paying to much for that dream home.  For example,  a few years ago I was asked to complete an appraisal for a purchase of an acreage parcel with a lovely home and horse stables in Hernando County Florida.  The buyer was from California.  Now at the time, acreage was worth considerably more per foot in California than in Florida.  I understand that the buyer wanted the home, but I would also think that the buyer would want to know that he was paying considerably more than the property was worth based on similar area sales.  The Appraisal Company had a relationship with the Realtor and another Appraiser from the office completed the appraisal valuing it at the sale price, which was considerably higher than very similar homes were selling for in the area.  Who does this hurt?  Everyone, not just that one buyer.  This creates a false market.  Now that the sale went through for the inflated price, there is one comparable sale at the higher price for all of the appraisers to use.  Exactly what happened in the boom.  Homes began to sell quickly and values rose at an unheard of rate.  There are only a couple of ways for values to increase at this rate.  Appraisers have to inflate values by going outside of the area or adding value to items that are unjustified so the loan will go through or the people have to pay cash for the difference, which we know is not happening.  The inflation is occurring already and we have barely hit the bottom.  The market went up through the roof, then it crashed and already values are increasing before our eyes.  In May homes were selling for $40,000-$60,000 in areas like Cape Coral and Lehigh Acres.  Now those same homes have been snatched up by investors and with no repairs made are selling for $60,000-$80,000.  I am not sure how we are all justifying the increase when the same home was only worth $40,000-$60,000 to the investor and nothing has been done to increase the value of the property.  So here we go again.  Up Up Up and if we go as fast as before, Down Down Down Down Down Again.  So, even though it costs a few hundred dollars more and even though you already paid for one.  Isn’t it worth a couple of hundred dollars more to protect what could be thousands or tens of thousands or even hundreds of thousands later.  Don’t you want to know the good deal you are getting is really a good deal.  Do not trust that everyone making commission off of your deal is looking out for your interests.  Do not trust your own biased opinion.  Remember, every house is perfect when you want the American Dream.  Order your own appraisal.  Protect yourself.
Heidi B Slusarski
StCertResREA RD6632
Appraising FL RE, LLC
Covering:  Lee, Collier, Charlotte,
Manatee & Sarasota Counties.
20+ Years of RE Experience.
411 Cape Coral Pkwy E
Cape Coral, FL 33904