Appraisals and your Mortgage

I went to a training today given on appraisals and your mortgage.  

Lenders, as a reaction to their losses in the sub-prime markets, are re-assessing their risk and making not only your loan qualification guidelines more strict but the guidelines for appraisers as well.  Maricopa county has been identified as a declining market. Our home sales prices have dropped in the county, with some areas hit harder than others.  This means the Appraiser is having to assess the sold price of the home down the street from 6 months ago with adjustments added or subtracted in for the market changes.  They are also required to have information about the current listings, the days on market and compare very similar properties.

The lenders have the same access as you to checking out approximate value: websites like Zillow offer Zestamates, but don’t consider all of the specifics of condition, location, upgrades etc in a home.  The Appraisers job is to look at all of the factors with each home and determine value. Two homes on the same street may be valued at very different amounts due to condition, lot size or position in the community. 

Foreclosure properties figure in as well.  If there is just a few in an area, the effect may not be as great to property values, they are considered in the appraisal process separately and adjusted.  If there are lots of foreclosures in the area, the foreclosures start to weigh in more heavily and effect the values of the community. 

Why share this with you?  When considering a home, or a community look at the whole community, not just the home as an individual house.  Your investment is in your home, and your home is in the community.  Once again, the magic words in real estate,  Location, Location, Location. 

Thank you Robyn Robertson of Suburban Mortgage, Anita Bell with TSA Title, and Scott Wortendyke with Instant Certified Appraisals for  the class.