Posted by: darren bird ®
02/08/2005, 20:25:24
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Yes all of the properties were rentals that I own. 4 of the 6 appraisals were on single family homes, and they all came in above what I would consider the “market” value (I had my realtor do some comparable sales data just in case these appraisals came in undervalue so I would have a position to argue with the bank). I know that the market value is something that is pretty hard to nail down, but these appraisals were definitely above the market value (in one case 20%). The other two appraisals I was involved in were multiple unit dwellings and they appraised at the “high end” of market price. I have read your arguments against raising (jacking up) the price on RTO deals, I have also Read Doug’s comments as well. I actually think you are BOTH right. Matt you are right because it is in everybody’s best interest that your tenant buyer has the ability to purchase the home at the end of the term. I personally don’t want to be in the business of throwing people out into the street who have kept their end of the deal. Doug, I think you are right because a RTO deal is a valuable commodity that people should pay a premium price for because if they are not, why am I taking the extra risk? The question becomes how do we achieve this? At least in my market place I have seen that appraisals come in higher than the general market price. So, what would be wrong with me getting an appraisal done, and marking up to that level (at least)? Property values could still drop, but at least I am not guessing. As to the cause of this, I am not sure. I do not that two of the 4 houses appraised were "junkers" and they had the largest disparity between appraised value, and market value P.S. I also realise that 6 appraisals is nothing to make sweeping conclusions about, but it is at least an interesting angle that nobody seemed to mention. What is everyone’s experience here with appraisals?
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