The Changing Marketplace

by 25 Mar 2010

Today?s Real Estate marketplace is changing. The shift to short sales has increased dramatically over the last 6 to 9 months. This increase is for a variety of reasons. There are two popular reasons. One being that the banks are sifting through their inventory of bad loans and are working with people who are trying to stay in their homes, and in other situations the banks are moving on to the foreclosure process. The other reason is the homeowner is deciding to go ahead and short sale their home, due to cuts in personal income, etc. There is also a third unpopular reason, with homeowners just walking away because of a loss of appreciation and a mortgage balance being higher than what their home is currently worth. As an appraiser, I have offered to be a back up appraiser for Realtors, investors and Brokers who may be in a jam. As an example, an investor has purchased a property and had it refurbished to be put back into the market. The issue arises when they have found a buyer, but the appraisal comes in lower than the agreed upon purchase price. Because of this, another appraisal may be needed and this is where I come in. In some cases a copy of the original appraisal has been brought to my attention. I do not make it a habit to see the other appraisal reports. I like to keep my report totally separate, keeping my judgment separate. But from what I have seen, the other reports lack the necessary explanation on the upgrades that have been done to the subject property, they also lack a market analysis on the affordability of the area surrounding the subject property and they consistently have a prevalent use of bank owned comparables in their reports. Realtors, Brokers and investors at first were reluctant to pay for another appraisal, but see the benefit of having one done. The extra cost is made back because the sale closes in a timely fashion! In this coming market, it makes good business sense to include this type of process to get listings sold. It will also help keep appraisers in the game! By the way, I have met a Realtor who specializes in short sales and does a wonderful job. I will be featuring him in the coming months on TBWS? correspondent Website!! I think you'll find him informative and on the cutting edge. Sincerely, Lamarr Banks


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