78 Fringe Tree

[ipoplaya_IHB]

[quote author="no_vaseline" date=1247482699]If they priced it at $645K right up front, they'd of made $20K more and had thier money 180 days sooner.



This thread is a spin off of this thread:



<a href="http://www.irvinehousingblog.com/forums/viewthread/3945/">http://www.irvinehousingblog.com/forums/viewthread/3945/</a>



<blockquote><strong>Janet - 18 December 2008 12:53 PM</strong>

The home profiled today has a comp at $799,000. Someone will buy it and make out quite well. As for the District, it is profoundly sucessful and will help this area long term. All the imaginary complaints about Columbus Grove are simple, uneducated sour grapes. It is a fine community with fabulous schools, parks and proximity to, well, everything.

</blockquote>


Don't hire Janet to advise you on your comps. You'll be worse in the pocketbook for it.</blockquote>


That was the thread Vas where you were arguing that auction values suggest and/or indicate general market values. Doesn't look like the lenders are seeing it your way or this $637K deal on 78 Fringe would likely have never gotten done...

 

[no_vaseline_IHB]

[quote author="ipoplaya" date=1247560121][quote author="no_vaseline" date=1247482699]If they priced it at $645K right up front, they'd of made $20K more and had thier money 180 days sooner.



This thread is a spin off of this thread:



<a href="http://www.irvinehousingblog.com/forums/viewthread/3945/">http://www.irvinehousingblog.com/forums/viewthread/3945/</a>



<blockquote><strong>Janet - 18 December 2008 12:53 PM</strong>

The home profiled today has a comp at $799,000. Someone will buy it and make out quite well. As for the District, it is profoundly sucessful and will help this area long term. All the imaginary complaints about Columbus Grove are simple, uneducated sour grapes. It is a fine community with fabulous schools, parks and proximity to, well, everything.

</blockquote>


Don't hire Janet to advise you on your comps. You'll be worse in the pocketbook for it.</blockquote>


That was the thread Vas where you were arguing that auction values suggest and/or indicate general market values. Doesn't look like the lenders are seeing it your way or this $637K deal on 78 Fringe would likely have never gotten done...</blockquote>


Yeah, but Janet was trying to say the comps were $799K! She was being extreme and so was I. We both missed it by almost the exact same amount - $162K!



Calculated Risk has a post today discussing exactly this topic, at least insofar as Freddie is concerned:



<a href="http://www.calculatedriskblog.com/2009/07/appraisal-update.html">http://www.calculatedriskblog.com/2009/07/appraisal-update.html</a>



<blockquote>There have been quite a few complaints about the new appraisal rules from real estate agents, homebuilders and mortgage brokers.



Last Friday Freddie Mac updated their appraisal guidelines and clarified that the appraiser is not required to use distressed sales (REOs, short sales):



The appraiser?s selection of comparable sales is crucial to providing an accurate opinion of value based on market data. With respect to comparable sales, the appraiser must choose appropriate comparable sales, and certify that the comparable sales chosen are those most similar to the subject property. In underwriting the appraisal, the underwriter must consider whether any adjustments are supported and are reasonable. The amount and number of any adjustments must also be considered. Typically, the higher the amount of the adjustments or the number of adjustments the more likely the comparable sales might not be representative of the subject property. Freddie Mac does not have requirements about what comparable sales the appraiser is to use. <em><strong>For example, we do not require appraisers to use Real Estate Owned (REO), foreclosure or short sales. However, if the appraiser determines that these are representative of the properties available to typical purchasers for the market in which the property is located, appraisers must consider their use.</strong></em>



My favorite paragraph in the bulletin is:



To determine that a Mortgage is eligible for sale to Freddie Mac, a Seller/Servicer must conclude that the Borrower is creditworthy (acceptable credit reputation and capacity) and the Mortgaged Premises (collateral) are adequate for the transaction. Credit reputation, capacity and collateral are often called the ?three Cs? of underwriting; if one of these components is not acceptable or if there is excessive layering of risk across components, the Mortgage is not eligible for sale to Freddie Mac. Sellers must accurately evaluate and determine a Borrower?s ability to repay the Mortgage.



Imagine that.</blockquote>


Apparently there was some other organic traffic that the appraiser could make a decision on. At the time (almost 9 months ago) it was lookin' pretty thin.....



Some parts of the IE I was watching for entertainment value only have a 10% spread between what it sells at the courthouse for and what the organic price is, so like the article says, it just depends on what is moving right now. Where does one value a 2M+ home in Coto these days, with over 10 years of supply and exactly one sale in the past year?