Re:Making sense of what’s going on in the housing market
by hardtke on Wednesday April 21, 2021 @01:32PM
(#26892789)
It's not just convenience and speed. In hot markets, the appraised values can't keep up with market prices (since the comps are a half year old). If the buyer doesn't have resources well above the minimum to make up for the difference between the appraised value and the sales price, it's likely a loan cannot be approved. Before 2009, appraisers would just appraise at the sale price because the real estate agent that hired them wouldn't hire them again if they didn't.
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Re:Making sense of what’s going on in the housing market
by aphextron on Wednesday April 21, 2021 @01:48PM
(#26893032)
>Before 2009, appraisers would just appraise at the sale price because the real estate agent that hired them wouldn't hire them again if they didn't.
Appraisals are made by the lending institution. That would be a very obvious conflict of interest otherwise.
Re:Making sense of what’s going on in the housing market
by hardtke on Wednesday April 21, 2021 @06:11PM
(#26896077)
Most mortgages are made by mortgage originators who resell them. If I remember how it worked before the crash, the agent, mortgage originator, and title agent would work together to make the deal happen. There were some kickbacks. The mortgage originator would hire the appraiser directly. Now the appraiser is assigned by a 3rd party, with one consequence being that appraisers generally don't know the nuances of local markets and are unable to properly price in a hot market.
Re:Making sense of what’s going on in the housing market
by Balgair on Wednesday April 21, 2021 @05:37PM
(#26895767)
Where I am, the appraisal gap is is ~18% of the sale price. So the houses are listed at ~$450k, get 12 offers for ~$530 in 36 hours, and get appraised at ~$450. Such is the competition, that buyers have to just pay the gap outright, turning the 20% downpayment into the appraisal gap.