Foreclosures Could Be Affecting Your Home Appraisal
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Before you can sell a home or get a refinance, you have to have your home appraised. And the number your county assessor uses to figure you property taxes doesn’t count. A real estate appraiser has to have a look. And that means that there are a number of factors that he or she will take into consideration. One of those things is what other homes in the area are selling for. And if there have been some foreclosure sales, that could mean lower prices on surrounding homes. Real Estate Pro Articles reports on some of the debate surrounding foreclosures as comparisons to other homes:
Sellers and brokers are criticizing house appraisers for giving too much weight to foreclosed homes when they make their home valuations.
According to Mike Davis, real estate associate professor at the Arizona State University W.P. Carey School of Business, said that appraisers are being conservative and they do not want to be the ones calling the market has turned around.
Some analysts said appraisers could not be blamed for low appraisals because when they look for recent sales to use as comparison sales, they usually find foreclosure sales. They also need to comply with recent changes in home valuation as described in the Home Valuation Code of Conduct.
If you are looking to refinance, you might find that your home suddenly doesn’t have the loan-to-value ratio you thought it did, thanks to a lower appraisal. In this case, you may have to take advantage of the government program Making Home Affordable. If your home is serviced by Fannie or Freddie, you can get a home loan refinance with up to a 125% loan-to-value ratio. This helps those whose home values have plummeted. You should also realize that foreclosures and the appraisal you end up with can affect the effectiveness of home improvements. Now may not be the time to get a home equity loan to make home improvements.
The good news, though, is that pending home sales are on the rise again. This is an indication that the housing market might be picking up again, and could lead to an increase in home values soon.
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September 14th, 2009 at 1:19 pm
[…] than your home is valued at. Realize that the county assessor will probably not count foreclosures. Your sale price will be affected by foreclosures, but the county assessor won’t change anything because of […]