Zillow Advice: Buying Process - How do appraisers base the value other than zip code comps?

Scott, my understanding of ...

Fri, 03 Jul 2009 20:05:00 GMT

Scott, my understanding of the FHA appraisal is that, yes, it "sticks to the house" but only for other FHA loans.tishala1 - appraisers go by either market value comps, replacement value (not likely in this case) or by income (used for multifamily and other commercial type properties typically). So, in your case it will be market comps. Most appraisers try to stay within 1/4 to 1/2 mile radius of the subject property unless they cannot find comps within the 6 month past review timeline.They will compare amenities, but don't expect lots of updates to get the same values that they did a few years ago. There has to be pretty big differences between homes to get much additional value at this point. And, it could just come down to having over-improving for the neighborhood.I wish you luck though!

"Don't forget to be awesome,"I ...

Thu, 02 Jul 2009 17:20:00 GMT

"Don't forget to be awesome,"

I think I puked a little in my mouth, really?? I mean really?....

Really?

The appraisor should be basing ...

Thu, 02 Jul 2009 16:26:00 GMT

The appraisor should be basing his comps off of homes as similar to yours as possible and as close by as possible, not all homes in a zip code. The comps also need to be very recent however and this sometimes pushes out the search radius he will use for his comps. Your agent should already have comps to give the appraisor that justify the price you offered. This will help him the appraisor and help you as well.
You also have several things going for you. Once an FHA appraisal is done, it sticks to that house. So any other potential buyers will have EXACTLY the same issue as you have. Essentially the Appraisor has set the price for the home and the bank will have trouble getting any more that that price unless it can find a Buyer who will pay more which is unlikely. Another advantage is that the Bank WANTS to sell you the home at the higher price, it is in their best interest to do so. If they balk at a lower appraisal you may be able to get THEM to finance the home for you at the higher price. They get to turn the bad loan into a good one and will be motivated to approve the higher number.

Happy Thursday Tishala1,You ...

Thu, 02 Jul 2009 15:49:00 GMT

Happy Thursday Tishala1,

You can stop stressing, or at least reduce your stress ;). They will not go by zip code. They are suuppose to draw their results from the final sales price(s) of the most comparable property to the one in question. So if it is in a different neighborhood, it shouldn't be considered in the appraisal. They usually try to base their comps off the Track #, so as to be certain they're comparing similar properties.

You are correct in your understanding that it is very competitive out there. I'm not certain which neighborhood you're specifically referencing, but most Los Angeles areas are in a unique situation in which inventory is low, and a large percentage of the market is turning over every month putting us in a seller's market where it is a great time to buy. Be glad you got into escrow at all as a buyer! A difficult feat these days, but certainly not impossible.

Don't forget to be awesome,

Seth T. J. Miller | My Real Estate Pro