4/9/2024 – Appraisals vs. Sales Price Every spring, we see the same thing: higher prices and some appraisal issues. We just closed on a buyer who purchased a house listed aggressively at $1.595 million and sold for $1.65 million! There were very few comparable sales that supported the 1.595 price and none that supported the 1.65 mil. The appraisal came in at $1.595, and the computer requested a review because the value was not approved based on the computer’s findings. Once the underwriter reviewed the appraisal and the appraiser answered a few questions, the lender accepted the value, and we moved forward to close the loan. The buyer had sufficient funds with his down payment to make the file work, and everyone was happy. If we had a different appraiser who likes to be a hero and bring in the value, then the appraisal would have likely been cut, and we would have had to get an additional appraisal to either support the value or turn down the value of the first appraiser. Have you ever gotten a second opinion on something, and they were like, “Wow, that guy did a great job!” Yeah, that rarely happens, so the last thing you ever want as a lender is an appraisal review where another appraiser checks the first appraiser’s work! Fannie Mae is doing an exceptional job of monitoring appraisers under Appraiser quality management. They are diligently looking at appraisers that undervalue or overvalue a property. In their latest study, Fannie Mae found that about 15% of the appraisals submitted were red-flagged for being overvalued, and 4% were red-flagged for being undervalued. Appraisers will always be correct in a perfect world, but we know better! So, do we like to stretch appraisals? Sure! We just need to justify the appraised value of a property! We can’t just make up numbers, as all the agencies (Fannie, Freddie, Ginny) and the Jumbo lenders are too sophisticated to allow us to make up a value just because a property got into a bidding war. Lastly, if you have a new kitchen, a pool, a new bathroom, a new roof, and have redone your landscaping and all of the comps have an original 1970s retro look, it will be hard to get top value on an appraisal, but you could sell for top dollar! Look at the comps before you take a listing and let the buyer know what the maximum you think the house will appraise for. If it sells for more, then that is great, but make sure you accept an offer from a buyer who can pay over the appraised value in a multiple offer situation. You’re welcome! LOL! Update on Condos 2nd week of April – No new condos… yet! YAY! The first of two signoffs is below: I am available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com. But wait, there’s more! Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE: American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough! American Beauty Gardens: 19% delinquency on special assessments due. 19% are 60 days or more late! We can do with 5% down, but others can’t! American Beauty Village West: Reserves Bouquet Canyon Village – Insurance – On Fannie’s list! Bridgewater, Emeryville - On Fannie’s list! Brookside Walk – Insurance – Cabrini Villas, Burbank - On Fannie’s list! Canyon Oaks – Insurance On Fannie’s list! Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list! Cornerstone – Insurance -On Fannie’s list! Encino Oaks – 5460 White Oak Ave – On Fannie’s list! Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list! Madison at Towne Center – Litigation – We can do with 5% down, but others can’t! Mariposa: Insurance On Fannie’s list! Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list! Princessa Estates – has $8200 in Reserves, and they are voting on an assessment in May! Rainbow Sierra Terrace – Underinsured and voting on Insurance in March! Scenic Hills – Insurance – On Fannie’s list! Shadow Ridge – Oak Park – Insurance -On Fannie’s list! Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list! Sierra Glen Condos – Insurance – On Fannie’s list! The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list! Treana – Stevenson Ranch: On Fannie’s list! Valle Di Oro – On Fannie’s list! Vista Del Canon – Insurance is too low, UGH! Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list! Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA – On Fannie’s list! West Creek Condos and Townhomes: Insurance On Fannie’s List! Please let me know if you hear anything new on condos or townhouses. Interest rates had a rough time last week. This week started lousy yesterday but slowly improved as the day continued. Today is a good day so far, and let’s hope it gets better again! 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge We do loans in all states, so call me with anything you need. Government Loans (FHA / VA/ USDA) are in the high 5’s and low 6’s Conventional Loans up to $766,550.00 are in the mid 6’s High Balance Loans $766,550.01 – $ 1,149,825.00 are in the mid to high 6’s Jumbo loans above $1,148,325 are in 6’s Bank statement loans - They are available with 10% down again! 6’s to 9’s depending on down and credit score. Profit and Loss Statement loans- You don’t need bank statements, just a profit and loss statement! No income qualifier – 40% down with reserves! In the 8’s! 0 down loans are in the high 7’s – 660 credit score min right now, up to $793,000.00. Private Money lenders - Hard Money Loans – 35% down! No Ratio Loans 30% down DSCR – Debt Service Coverage loans with as little as 15% down Bridge Loans - typically 7.79% with limited fees – and they get you where you need to go! 0 down California Dream for all Equity Share – Registration April 3 to April 29, 2024 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates! Interest rates are subject to change without notice! The above are LA County Loan Limits. I am still available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com. Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.
