How much is your little spot on the map worth?

By Bobby Tanzilo Managing Editor E-mail author | Author bio More articles by Bobby Tanzilo

Published May 7, 2008 at 3:52 p.m.

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Posted by MortgageManChris on May 21, 2008 at 2:48 p.m. (report)

This looks like the same thing I see all the time. As a professional mortgage consultant I find this more and more. As a consultant my job is to elevate the borrowers knowledge of what is happening in TODAYS new world of mortgage lending. In todays new market, assessments are off from appraisals due to changing guidelines in how a lender will evaluate a properties value. In todays lending arena the lender wants comparable sales within a one mile radius that is the same bedroom count, same age, same square footage and all that have sold in the last six months. Now, today is May 21st, 2008. What has happened in our market for the last 6 months? Are people out looking at homes, writing offers that sellers find acceptable and moving? The answer is yes and no. Yes, because there are comparable sales to support the values on some homes, no because we are coming off the winter with the most snow in 100 years. Not a real good picture for our area as far as that guideline is concerned. For the most part the folks that are selling their homes in that market have an impending event in which they are required to sell during that time, a job transfer, a divorce, expecting a larger family, etc. These sellers are usually inclined to take a lower offer to rectify their situation and that drives appraisals down. Now throw in foreclosures and bank owned homes.....the picture is getting clearer. Assessors are usually appraisers hired by the county to re-assess the values for taxation. Typically the assessed value is less than the appraised value due to the lag time between a communitys assessment (done usually every 2 years) and when the home is being appraised for valuation for a purchase or refinance transaction. With the lending guideline change for 12 months to 6 months regarding the use of comparable sales data, values are reflecting the sales data from a long snowy winter, and declining economic conditions. This is why the data doesn't match. The auto evaluation systems may not be in sync with todays new world lending guidelines.

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