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Bill Cobb

Will Baton Rouge Home Appraiser Consider Multiple Offers OnPurchase?

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Real Estate Appraiser with Accurate Valuations Group, LLC LA St Certified 851

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January 30, 2013 05:19 AM

Will Baton Rouge Home Appraiser Consider Multiple Offers On Purchase?

BATON ROUGE REAL ESTATE AGENT QUESTION TO BATON ROUGE APPRAISER :

Bill, The Such-And-Such Subdivision house has been on the market since Saturday morning. 5 showings, 1 offer, andan email from an Agent asking about asking price support. I think it will end up selling in the mid 200s. Will anAppraiser consider multiple offers as a factor? Shows demand in my opinion.......just curious.

By the way, your grid of comps provided for the listing price was very helpful in my response to the email.

Thanks again

APPRAISER ANSWER :

Yes, an experienced Home Appraiser "should" consider multiple offers, especially when there appears to me to be alimited supply of listings on the market. If it sells in 4 days and has multiple offers, that absolutely speaks of strongdemand. Perhaps a listing price slightly less than market?

AND, I'd highly recommend that you be involved as much as possible, even by requesting to meet the Appraiser atthe time of their inspection to present them with these multiple offers and updates and upgrades list, walking theAppraiser through showing them these updates and upgrades. The intention of Dodd-Frank, initiated in August 2010,was to open up the communication lines between Agents and Appraisers that HVCC in 2009 seemed to close. Youhave every right to be there when the Appraiser is there and to present them with multiple offers, list ofupdates/upgrades and any comps you felt were comparable. On your comps, some Appraisers will be thankful forthese and some Appraisers will feel a little pressure by these. My process is to always ask, out of professionalcourtesy, for the Listing Agent's comps used to market the property up front before the inspection to avoid an appeallater. What Appraiser generally don't do any longer is call the Agent after the inspection and say, "Hey, I'm coming upshort on value, can you send me your comps?"

LISTINGS IN APPRAISALS THE NORM!

Yes, it's true that Understanding the Appraisal Process on Active Rain stating, " The appraisers job is to provewhat HAS HAPPENED to the market, ie, past tense. NOT what IS HAPPENING."

However, today, Lenders or AMC's (Appraisal Management Companies) generally require 2-3 listings in HomeAppraisal reports, preferably pending or under contract listings. In a market where supply is low and multiple offersare taking place, sometimes current pending listings can help weigh higher market support. If subject is pending at$200,000, 4 solds sold 60 to 90 days ago support $195,000 and 3 "current" pendings support $200,000, then thelistings may very well help arrive and support the $200,000 value. While the Appraiser can agree on the $200K, thefinal decision can rest with the mortgage underwriter because of no SOLD COMPS supporting the deal. The intent ofusing listings is that lenders want to know what's taking place right now in the market, not exactly what took place 9 to12 months ago.

Do note that generally the market Listing To Sales Price Ratio is applied to listings. If homes are selling at 98% oflisting price, 2% less than listing price, then a listing for $205,000 would be adjust downward by 2% or -$4,100.

Hope this helps.

Bill Cobb, Appraiser

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