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Appraisal Update

Yesterday I had a call to determine the probable sales price of a vacant lot. My research showed that there were no comparable sales in the neighborhood in the last few years, and no good comparable neighborhood sales in the last year, either. Time to call an appraiser colleague for his input!

In addition to sharing thoughts about this particular lot, we shared what’s going on in our aspects of the real estate business. He said that most lenders, based on all the news reports, are considering Pinellas County as a declining market for prices. Many of the lenders are requiring comparable sales within the last 90 days!  Some are also requiring at least two active listings and at least one property with a contract pending.

If the appraiser can’t find properties meeting the lender’s guidelines, lenders now prefer the appraiser to choose properties outside the neighborhood, perhaps a mile or two away, rather than sales more than 4 months old. In some cases where the appraiser still cannot substantiate enough sales, the lenders are turning down the loan.

Isn’t turning down a loan – and thus stopping a purchase – because other homes haven’t sold,
a self-perpetuating prophecy? Now there will be an even longer period without a sale, which may cause the next sale(s) to be rejected.

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