MarksAppraisal/RealEstateBlog

As a R.E. Appraiser when you deal with a R.E. Agent, 9+ times out of 10 it will be for a Home Purchase.  Of course, there are those rarer times when a distressed sale fell through, and now they have to establish a Market Value for the Bank or Corp. Owner, for the property.  There may be other Estate, other reasons also, where there is a Realtor, but rare. 

The issue for a Realtor is getting the Best or usually Highest price possible for a given property so as to generate the greatest Commission (typically Realtors get 1/4 of 5 or 6% of a the Closed Price of a Property).

The issue for an Appraisers is simply to objectively apply USPAP principles to derive a Fair estimate of a Final Market Value to a particular property.  While similar in some respects, in practice the 2 parties goals can be quite different indeed.  for example, I once went to a High-End Condo Townhome, 3/3 3 Levels, with a View of NYC, a Garage, Full Amenity Condo Project - Avg+ or Good Condition, the works, however, MAny or even most of the Sales and Listings in this Project were in Foreclosure process or typically Short Sales.

There were also very few Sales the previous 4+/- years.  Due to the isloated Location of this Project, almost a mile to the Residential part of the City, the unique Market Appeal and Amenities, the only sales that really Comped out to establish a Market Value were in the Same Project.  The Realtor handed me a Contract and also supporting closed Comps.  Lo and behold, ALL of them were from Other Cities/Towns - ALl of which had significantly different (and  Superior) Market, Location Appeal and also WAY higher prices than Comps with in the Subject Project over the Past Year.  I politely accepted these Comps and made a general Comment, not on Price though and that was that.

I valued this Property FAR lower than the Contract Price and Comps suggested by the Realtor.  I though for sure the AMC and the Lender would be all over me like a cheap suit to look at this or that Comp, a suggested Price Increase, etc...  No, nothing, no Call Backs from the AMC to suggest a Change in Price. As far as I know, the transaction either went through based upon my value, or they may have gotten a 2nd or 3rd Appraisal done.  Bottom Line, stick to your Convictions and Discipline of Diligent, thorough Market Baased Appraisal Practice and everyone in the long run benefits.

In conclusion, Realtors and Appraisers should work together to create a Market Based Real Estate Environment, where the Prices and Values are not exagerated in order to fool the Parties involved, or inflate Values.  Realtors want to quickly and efficiently sell Real Estate and Appraisers want to derive a Market Based opinion of Market Value, utilizing realistic, timely Comparables; not Sales that are not Comparable to the Subject at all, for whatever reason.  


Posted in:General
Posted by Mark Radko on March 24th, 2013 10:47 AMLeave a Comment

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Often in some NJ urban areas, the short sales and pre-foreclosures are becoming the market.  They may or may not sell significantly below the "market" rate.  That depends on the typical factors that sell houses: location, condition, amenities; external, functional and physical obselescence, etc...  One of these houses in good condition and location, etc... can still sell for fairly close to a conventional for sale property, despite a distressed sale or seller. 

Posted in:General
Posted by Mark Radko on November 7th, 2008 1:13 AMLeave a Comment

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