Welcome to this week’s edition of Houston Real Estate Radio!
We have another packed show for you today, guys! Here are some links to some of the topics on the show today. Don’t miss it, the show starts at 2PM on am700 KSEV or streamed live HERE. We are proud to be your voice for Houston Real Estate!!!
We are doing something a little different this week. Appraisals are quite often the biggest concern for a seller today. We have gone from lending being the issue to the appraisal process being the problem. As we transition to a seller’s market, quite often the competitive auction process of selling your home will result in a market price that will not appraise. We brought in Mike Brubaker, President and CEO of Brubaker and Associates, to answer all of our appraisal questions.
Here is a breakdown of the show:
Segment 1:
Segment 2:
Segment 3:
Segment 4:
515 Island Spring Ct, Spring, TX 77373
From 3-5PM today, RREA top producer Sheryl Hunter will be holding an open house in the beautiful Spring Lakes neighborhood in Spring, TX. If you are considering a move, you have to see this beautiful home!
Here is a map to the home:
You can read more about this beautiful home here. Call today for a private showing! 281.288.3500
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Don’t forget to ask your real estate question this week to have it answered on the air. Call the 24hr Answer Line at 281.882.8088 or use hashtag #HRER on Twitter! Talk to you next week!
[box type=”alert” icon=”none” size=”large” style=”rounded”]Don’t miss us next week as we broadcast this show from The Woodlands Fall Home and Garden Show!
Next week we will be doing this show from the Woodlands Fall Home and Garden Show at the Woodlands Waterway Marriot. Come by and see us at the broadcast booth. We are partnering with the Check a Pro Radio Show and the Energy Savings in the Home Radio Show and will broadcast all three shows from the Marriot that weekend.
If you are at the show, stop by and say “hi”!
In partnership with:
Don’t miss it!
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Patiently waiting for your response…
I am enjoying the conversation. It seems that you elected to disregard my statements in the previous post about buyers paying the difference between appraisal and market price. Based on statements made by yourself and realtor Mary, the only thing that matters is that the buyer and seller agree on a price.
Quote from Mary: “If I bring a buyer willing to pay a certain price for a home, how in the world can an “appraiser” from the other side of town tell them it is not worth that price?” This does indeed set the market price. That is not, however, the market value. If your buyer and seller are so firm in their agreement on this price, the appraisal is irrelevant. They should have no problem in paying the extra cash to make the deal work. The price was agreed to. In the minds of the buyer/seller market price equals market value. Wrong, wrong, wrong.
I have seen many “deals” where the buyer and seller have agreed on a price and the appraisal comes in thousands lower than the contract. That does not mean the appraiser was wrong. However, if the buyer believes the price is market value, extra cash can make the deal work. They are the neighborhood heroes who set the higher market values. The notion of multiple bidders running up a purchase price only works on cash sales or when they pay the difference between the market price/contract price and the market value seen in the appraisal. From a banks perspective, multiple bidders do not make a property more valuable. Appraisers operate on statistical/historical data. Appraisers do not appraise on what we think the future is going do, Momma really loves the kitchen and she’s going to get that house, or price per square foot says the value is worth x.
Appraisers do not set out to blow up deals. They protect the lender from loaning out too much on a property. Period. If a person feels that a house is worth more than an appraisal value they may still buy the property by putting a little more of their skin in the game…
@Jesse,
When the appraisal process kills real estate transactions on a large percentage of real estate deals, there is a problem. When supply and demand creates a market price, that determines a value. On a micro scale, you are right about someone stupidly making an offer that is above the true value of the property and the need for the appraisers to protect the lender’s interests in the transaction. On a macro scale, when the appraisal process kills a large percentage of real estate deals, there is a problem.
Again, thanks for listening.
Oops. Typo. Meant to say be the hero not by the hero…
I don’t think I missed the point. The general message I took from today’s show was appraisers don’t know the markets as well as the realtors and sellers do. As I said in my earlier post the willing seller and willing buyer agreeing on a price only works when it’s a cash deal. Market price and market value are two different things. As far as the above poster talking about deals being busted by appraisal value, nobody is stopping the more knowledgable buyer from putting up the extra cash to make the deal work. If they feel that the home is worth the contract price they can pony up the difference and by the hero that sets the new high sales price for the neighborhood. It’s just that easy.
@Mary – Let’s hope the regulatory agencies realize the inherent problems with the current standard. I had Mike on to discus the business and shed some light on why these deals are falling out at the appraisal. Thanks for listening.
I am an area Realtor. I can’t count the number of times that the appraiser has broken deals. If I bring a buyer willing to pay a certain price for a home, how in the world can an “appraiser” from the other side of town tell them it is not worth that price? If we have multiple offers and the bids creep higher than the “appraisal” value of the home, who gets the house? What is the point of the market if the market cannot dictate the price?
Jesse, thanks for listening! I am afraid you missed the point of the show today. This was not a “realtor good / appraiser bad” discussion. I did this show on appraisals today because we have had many deals break at the appraisal. Agreed that price/sq ft is a simplistic formula for predicting the outcome of a negotiation. At the end of the day, it does not matter what number my agents list a home for. The outcome of a negotiation between buyer and seller determines the market price. The increased regulatory environment increases the chance for the bank to pick an appraiser that is not familiar with the area he is appraising. Especially as we convert to a seller’s market, this directly results in deals breaking at the appraiser level.
The regulations imposed on lenders has increased. During the housing bubble, the regulations were too relaxed. Now, the pendulum has swung too far in the opposite direction. The way they are forced to operate with regards to appraisers does not pass the sniff test. There is no way that the random selection of appraisers produces the most accurate result for anyone involved. Is this the appraiser’s fault? Certainly not. The appraiser cannot be expected to be an expert on the hundreds of market areas in the Houston Metro area.
I am all for more education in the real estate industry- appraisers and agents! I have spent years as a professional and hundreds of hours becoming world-class at helping clients buy and sell property. The barrier to entry for both realtors and appraisers is painfully low.
I appreciate your listening and invite you to contact me further if you have any more questions/critiques. I wish you luck in your career as an appraiser.
Oh, oh, oh! I almost forgot. There was a constant theme by the host and Brubaker about the competency of appraisers and the fact that appraisers ONLY have two years of training to become licensed/certified by th state. Um ok, anyone can become a realtor in just over two months. FAIL! Hahahaha!!!
I happened upon your show today. It was pretty entertaining. It was a little heavy on the appraiser always wrong/uninformed, and way heavy on the realtor buyer/seller is always the best informed/most accurate. Some things to consider: cost does not equal value, price per square foot is an extremely simple and inaccurate method used by realtors, market price occurs when buyer and seller agree on a price… Using the banks money (only true on cash deals). Like I said earlier, an entertaining show. On another note, did anyone find it humorous when Brubaker answered the question about new constructing failing to appraise and him saying something along the lines of I’ve heard some stories of that happening… ROFLMAO!!!