Clear blue skies, spectacular sunsets, beaches, rivers brimming with life, art shows, music in the parks and soon, the Loggerhead turtles will seek the dunes to lay their eggs.
How wonderful life is in Brevard.
The real estate action is fantastic too, with far more activity than in the past year. Offers, counter-offers, short sales and foreclosures keep everything moving. However, there can be some trouble in paradise for those experiencing low appraisals. With lender restrictions, appraisers appear to be guided to lower their value indications and cast a conservative view on the market. What is an appraisal? An appraisal is an opinion of value rendered by one designated and licensed to perform this evaluation. The appraiser is typically hired by the lender when a buyer applies for a loan on a property.
The appraiser inspects the property, then studies the market for sales that are current and comparable to the property. In analyzing the information, the appraiser adjusts the recent sales that are comparable by dollar values placed on differences in age, condition, location, amenities, quality of construction and time of sale.
A market depreciation is used if the sale was not quite as recent as other sales. A depreciation factor is used to indicate that the market value has gone down since the sale of the comparable property. An appraisal is subjective and given as an opinion of value. The value indicates a range because the value is not a fact but an opinion. The opinion of value is determined to be what a typical buyer will pay for in today's market.
This appraisal is an integral part of the loan process. The appraisal can kill the purchase if the value does not meet the contract price of the property and financing is necessary. Most recently, there have been appraisals that come in lower than the contract price. How can the market recover if the past sales indicate a depressed market?
The only way to increase the market value of a neighborhood and the homes within is to have some cash sales or sales where the down payment is so significant that the appraisal does not negate the financing. The lender is not causing this problem as the lender is bound by problems and current restrictions on mortgage practices.
The appraiser is not the problem because he or she is at risk if the work is not performed in a conservative manner. If we can inch upward in our value indications and not put the lender or the buyer at risk, the slightly higher sales that have been killed by appraisals will allow for a slight change, which is a welcome relief in our real estate market.
Let's keep the action moving and enjoy the treasures of this beautiful place we call home.
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