Friday, December 21, 2007

Still looking for little cash back, eh?

Check out this Redfin blog post written by an appraiser who asked a few too many questions. Here are a few highlights:

"... I noticed that the purchase contract is for the amount of $620,000. But when I met with the seller at the house, he tells me that there is another purchase contract floating around somewhere for the amount of $680,000."

"I asked him, in this market, how did he get from $620,000 to $680,000? Did the buyer agree to this increase and is the contract fully executed (meaning has it been signed by both buyer and seller)? He then told me his loan broker determined the new price and needed the value to be increased to make this deal work."

"Because there was so much confusion, I pulled out my cell phone to call the loan origination manager at my office with the hopes to clear up some of these questions. He reached over and yanked the phone out of my hand and said to me, 'I don’t want the appraisal anymore. You can go.' "

3 comments:

Anonymous said...

I wonder how many of those types of deals that same appraiser did last year or the year before.

Also, the same appraiser is quoted throughout his blog as saying that things are going to stabilize. Now you tell me how things are going to stabilize when that same appraiser was set to appraise that2500 square foot home in San Fernando for 620k. I checked the census numbers and the median household income in San Fernando is just under 40k????

AA

Kate said...

Dear AA:

Yeah, I don't think we're close to stabilization either. There's no way that price is sustainable in that area.

But I do like that at least one appraiser has stopped doing these deals.

Laker said...

First, the census does not take into account money under the table...So incomes are somewhat higher.
However, that is no problem at all, when you take interest only loans, and better off neg-am loans so that you don't even pay the full interest. With such loans, you can actually START by paying (with teaser rates) LESS than what you would pay RENT for that same house. The problem is of course, that at some point (2 years 2/28 or 3 in 3/27) the payment would increase big time. Check this out, i think 90% of the houses i've seen in the last month were purchased during 2005-2006...they are 2/28 in big trouble sellers or 3/27 of smart sellers that see the tsunami coming in couple of months...