Home appraisal valuation question?

You are generally correct...things like foreclosures, short-sales, and other distressed properties are NOT supposed to be used for an appraisal, and too many unknowledgeable people in the industry think that they should be.

However, there is ONE exception to the rule.

If you live in a neighborhood where a substantial number of homes ARE distressed properties, then an appraiser has no choice but to reflect that in the value.

California has been particularly hard-hit with with downgrade in the market due to tons of interest-only loans and declining property values.

Is your property unique so that it is difficult for the appraiser to come up with better comparables? A matter of the real estate market slump? Or sometimes a lazy appraiser? All areas are different with different markets, conditions & situations. If there are many distressed properties in your area, it may be that it is totally inline with the standards of the current market.

We sometimes had this situation in Washington State in years past & with the sub-prime taking a big dookie last August, I suspect this is going to the a problem again to many. We're just not seeing it yet in our Puget Sound area that I have heard.

If you can find a local Realtor that would be kind enough to research & come up with better comps for you, you could provide those to the appraiser & contest his valuation. It is often not soothing to an appraiser's ego to have their comps contested, but it can be done. It may just be an uphill battle.

Typically, they should be close in proximity, condition, size & not older than 6 months at the most. 3 months is better. The appraiser can make adjustments (+/-) from there with regard to location, size, condition. If you are in a development or condo complex, 2 comparables in the same development would be ideal.

They often call the listing agent also to ask if there were any "consessions" to the buyer or special conditions: did the seller pay a portion of the buyer's closing costs that were included in the sales price? A short sale? A sale to a relative?

Hope this helps.

If there are enough REO/foreclosure homes in the neighborhood he does have to use them as they reflect the true make up of the area. Normally they will exclude the single lowest and highest comps as there is normally specific reasons for those sales, but if there are other bank sales it may just mean that you are in a neighborhood with declining values. Tough to hear, but unfortunately your own neighbors are the ones who decide what your home is worth.

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When other homes do not sell, the appraiser may have only distressed sales for comparison. Is you appraiser ignoring other recent non-distressed sales?

If you're after a lower rate only and not interested in any cash out you may want to look into a modification of your loan. Even if you're not late on your payments you can usually still qualify, I know this because I did one on my home.

It lowers your existing fixed rate or locks in your adjustable rate a little longer so your value recovers and your payment remains manageable.

All of this without the high cost of a refinance.

Worth looking into... let me know if you need to post another question for more information.

No, County evaluation is for tax applications. that's UNRELATED to the honest marketplace cost. I stay in a city the position homes that are priced at nicely over $a million million have a tax cost of in simple terms $300K.