Need A Real Estate Appraiser

[Safetech]

Years ago, we bought the house next door to us to move my parents into when their health started going down hill. We lost my dad about three years later, then lost my mom in 2009.

After that, our son and his GF (now wife) moved in. They basically pay the mortgage and we call it "rent". (Heck of a deal, I know.) But I it's time for them to start having something to show for their money, long term. So we've decided to sell them the house.

Here's what I need....

I would like to get an appraiser to give us an idea of what the house *would* appraise for, so I have a baseline to start from.

We're obviously going to give him a "deal" - including counting everything he's paid towards principle up to this point going towards the price. (Kind of a retroactive "rent with the option to buy".)

I don't want a full-blown formal, gazillion page "official" appraisal. Whoever his lender turns out to be, most likely isn't going to accept it. They'll want their own. So there's no sense in paying the $350 +/-, and then him having to pay it all over again to his lender for another appraisal.

I just need someone (an experienced appraiser) who I can pay for their time to just look the place over and come back with a verbal, unofficial, "This house would appraise for $XXX,000".

 

[coopermania]

Well, if it was my son I would sell it to him for the mortgage payoff and ad his name to the house before he gets married.

 

[webb297]

Well, if it was my son I would sell it to him for the mortgage payoff and ad his name to the house before he gets married.

If the OP has multiple children, that course of action might not be popular among the other siblings.

 

[sgt23preston]

Sgt Preston here...

Call a local real estate agent from a large group...

Tell them you are thinking about selling the house...

Don't tell them your real plan is to sell it to your son...

Ask them to stop by & give you an idea of what it is worth...

They will typically research recent sales of similar homes in your neighborhood...

And what their fees would be...

And what it would take to make sure the house appraises at sale price...

And what needs to be done to it to pass inspection...

It's what they do...

There is NO obligation...

 

[MikeTF]

Years ago, we bought the house next door to us to move my parents into when their health started going down hill. We lost my dad about three years later, then lost my mom in 2009.

After that, our son and his GF (now wife) moved in. They basically pay the mortgage and we call it "rent". (Heck of a deal, I know.) But I it's time for them to start having something to show for their money, long term. So we've decided to sell them the house.

Here's what I need....

I would like to get an appraiser to give us an idea of what the house *would* appraise for, so I have a baseline to start from.

We're obviously going to give him a "deal" - including counting everything he's paid towards principle up to this point going towards the price. (Kind of a retroactive "rent with the option to buy".)

I don't want a full-blown formal, gazillion page "official" appraisal. Whoever his lender turns out to be, most likely isn't going to accept it. They'll want their own. So there's no sense in paying the $350 +/-, and then him having to pay it all over again to his lender for another appraisal.

I just need someone (an experienced appraiser) who I can pay for their time to just look the place over and come back with a verbal, unofficial, "This house would appraise for $XXX,000".

If you have the time, you can do the appraisal yourself. I'm selling my house right now and here's what I've done to determine it's market value:

1) I look up the assessed value of the home on http://sdatcert3.resiusa.org/rp_rewrite/

2) I then look for homes like mine that have recently sold here: http://www.zillow.com/ (there's a filter for 'recently sold')

3) I compare the assessed value to the 'recently sold' price for comparable homes. Using 16 homes that have sold in our area since 1/1/2013, I have found that homes are selling for about 122% of their assessed value in my area.

I think if you do this exercise with your son, laying out all of the data, the two of you can come up with a number that you agree on and you can save yourself the $500 for an appraisal, unless of course that appraisal is required by the bank for financing. Either way, you probably want to do the exercise on your own.

 

[Safetech]

The house was actually going to be a long term investment. Selling it now while the market is still low, we will actually be losing money. Plus, we're going to still knock money off of the current market value.

Not to mention; he's been living in a $1,300+/mo house for $750/mo for the last four years.

And yes, the OP "has other children".

 

[Safetech]

Sgt Preston here...

Call a local real estate agent from a large group...

Tell them you are thinking about selling the house...

Don't tell them your real plan is to sell it to your son...

Ask them to stop by & give you an idea of what it is worth...

They will typically research recent sales of similar homes in your neighborhood...

And what their fees would be...

And what it would take to make sure the house appraises at sale price...

And what needs to be done to it to pass inspection...

It's what they do...

There is NO obligation...

I would be uncomfortable with that. It wouldn't be fair to waste someone's time, when they really would not be getting the sale.

 

[ShoreShooter]

Why not turn this process upside down?

Instead of arriving at a sale value and then going for a mortgage, why not begin with a good mortgage broker? See if they will begin the process with an appraisal and determination as to how much loan they will make, and then set the value from there?

First time homebuyer programs often have very high LTV levels, something like 97% loan. So he borrows what he can, and the equity becomes a "gift" from you.

He buys at today's market value, which is fair to you and the other kids. He isn't over or under paying, so its fair to him too.

 

[Jim12]

It's between related parties, so not an arms-length transaction; OP might want to have a real estate/tax lawyer advise and bless it to avoid/minimize any "taxing headaches."

 

[PJDiesel]

I would be uncomfortable with that. It wouldn't be fair to waste someone's time, when they really would not be getting the sale.

Wouldn't matter, this isn't (by far) the way the process works.

A RE agent (aka, Salesperson) and a Licensed Real Estate Appraiser are two totally different things. A RE agent cannot legally provide an opinion of value for you to rely on. They aren't trained or licensed to compare comparable sales and make appropriate (market based) adjustments.

 

[PJDiesel]

This will sound dik'ish no matter how I say it, but,...... here goes.

I've been licensed since 2002, Certified somewhere around 2004. If I was casually speaking with my neighbor out at the mailbox about values and (off the cuff) said: "You're house should be worth somewhere around "$X". I just completed an Appraisal on his home. It's the basic legalities of having the public trust. This includes all the possible future legal ramifications of my (so called) Appraisal.

You're better off researching recent sales, physically driving by them and agreeing they are similar, go from there.

 

[MDGolom]

Sgt Preston here...

Call a local real estate agent from a large group...

Tell them you are thinking about selling the house...

Don't tell them your real plan is to sell it to your son...

Ask them to stop by & give you an idea of what it is worth...

They will typically research recent sales of similar homes in your neighborhood...

And what their fees would be...

And what it would take to make sure the house appraises at sale price...

And what needs to be done to it to pass inspection...

It's what they do...

There is NO obligation...

The only problem is a real estate agent will tell you what they THINK it should sell for, not it's actual value. My sister was selling her house in NoVa and the agent said it was worth $750,000. She had another agent come in and said it should sell for $699,000. That's a $51,000 difference. The appraiser is the only real source for determining the actual cost of the house. If you price it too high, when they go for a mortgage, they won't get it if it doesn't appraise.

 

[PJDiesel]

What lender are they using, there is a way to possibly make this work. If you call the broker (or bank) and tell them what you are attempting to do they can shoot you a list of their panel, and probably tell you which ones to avoid. This way, you already know your Appraiser is approved for that particular lender.

Now, your contract would need to be ratified and the file ready for underwriting within 90 days of that first reports effective date (inspection date) for this to work out.

My recommendations would be either APGFCU (or) Fulton Mortage (Columbia Bank). Chase, BOA, PNC and the other heavy hitters are now using AMC's, they are going to hit you for $500 for an Appraisal and won't even think of letting you do what I am suggesting is possible.

 

[MikeTF]

The only problem is a real estate agent will tell you what they THINK it should sell for, not it's actual value. My sister was selling her house in NoVa and the agent said it was worth $750,000. She had another agent come in and said it should sell for $699,000. That's a $51,000 difference. The appraiser is the only real source for determining the actual cost of the house. If you price it too high, when they go for a mortgage, they won't get it if it doesn't appraise.

And we need to remember that some Listing Agents (realtors) will try to attract clients by telling customers that they think they can sell their house for more than the market value, just to get them to sign a 6 month agreement to list with them. They know full well that in a month, they will tell the customer that their house isn't selling because of 'changes in the market' and ultimately the seller will spend more time with their house on the market and have the added disappointment of having to sell their house for less than what they had hoped for.

 

[PJDiesel]

The only problem is a real estate agent will tell you what they THINK it should sell for, not it's actual value. My sister was selling her house in NoVa and the agent said it was worth $750,000. She had another agent come in and said it should sell for $699,000. That's a $51,000 difference. The appraiser is the only real source for determining the actual cost of the house. If you price it too high, when they go for a mortgage, they won't get it if it doesn't appraise.

Bingo.

A RE agent has a dog in the fight. If they get a listing out of the deal they are looking at 2.5 - 3% of the contract sales price. If they give you a number you are insulted by they never get the listing agreement. If they fluff you up and make you think they (somehow) can get something higher than the market will command, you (the seller) gets screwed over in the end.

A state licensed RE Appraiser gets paid a flat, one time fee. I could honestly care less what you think your house is worth. I sign an affirmation stating I have no financial interest in your property and am a 100% impartial / independent fee Appraiser with no other motivation other than my fee and the rules of USPAP and FNMA. I get paid and a few days later deliver a report, ....end of story.

 

[coopermania]

The house was actually going to be a long term investment. Selling it now while the market is still low, we will actually be losing money. Plus, we're going to still knock money off of the current market value.

Not to mention; he's been living in a $1,300+/mo house for $750/mo for the last four years.

And yes, the OP "has other children".

Ahhhhh tell the other kids to quit crying the world is a harsh place.... But truth be known I have only one kid, So what do I know.

I would not waste a realtor's time either.

 

[Ganegrei]

Ahhhhh tell the other kids to quit crying the world is a harsh place.... But truth be known I have only one kid, So what do I know.

I would not waste a realtor's time either.

Has the OP considered selling the house generally and pocketing the money?

I would never want a close relative living next door to me.

 

[PJDiesel]

+1
That being said, doesn't sound like you need an appraisal. Look at recent sales, both sides come up with a number and hash out the differences to get to a price you both agree on.

This

Also, consider coming up with a price and then including a "gift of equity". This can save your child PMI and other hassles of not having 20% down.

I can show you (fairly quickly over the phone/email) how to search SDAT for recent sales within your immediate market area. A few hours of leg work and you'll have a pretty good starting point.

 

[28Shooter]

This

Also, consider coming up with a price and then including a "gift of equity". This can save your child PMI and other hassles of not having 20% down.

I can show you (fairly quickly over the phone/email) how to search SDAT for recent sales within your immediate market area. A few hours of leg work and you'll have a pretty good starting point.

Good advice. A full blown narrative appraisal is going to cost you some money and I personally don't think that's what you need. Since licensing, you'd be hard pressed to find an appraiser to give you a letter form valuation.

 

[ShoreShooter]

What lender are they using, there is a way to possibly make this work. If you call the broker (or bank) and tell them what you are attempting to do they can shoot you a list of their panel, and probably tell you which ones to avoid. This way, you already know your Appraiser is approved for that particular lender.

Now, your contract would need to be ratified and the file ready for underwriting within 90 days of that first reports effective date (inspection date) for this to work out.

My recommendations would be either APGFCU (or) Fulton Mortage (Columbia Bank). Chase, BOA, PNC and the other heavy hitters are now using AMC's, they are going to hit you for $500 for an Appraisal and won't even think of letting you do what I am suggesting is possible.

By banking regulation a bank may not use an appraisal they did not order, or was ordered by another bank.

Which is why I suggested beginning with a loan app at a bank, and see what they will lend based on the appraisal they order.