We had our office meeting last Monday (I’m a real estate agent) and the mortgage banker who works in our office said something very interesting. We were talking about buyers and appraisals and he said that appraisers are now looking at a property’s history when appraising it.
Basically, let’s say you purchase a house under market value and quickly put it up for sale at or above market value. Then a buyer has it appraised. The appraiser will see the price you bought it at recently and he may only appraise for that amount, not the amount you’re selling it for.
This is very important if a buyer is using an FHA loan. I’m pretty sure conventional loans are still ok.
Also, if you’ve made significant upgrades, they will take that into consideration. I think they are trying to keep people from quickly flipping properties with nothing done to them.
Has anyone else heard of this?
Yeah this has been a factor for awhile it is what banks call title seasoning!
Most banks will not lend on a property unless it has had 6 months+ title seasoning
or lets say that the property has an increase in price of 50k in 6 months the bank wants to know what was done to the property before they lend! If they do lend!!
This has been a problem for a few years now!
Hey,
Great guys, them banks.
Peace,
Richard
appraisers are required to provide 3 year prior sales history of the subject property being appraised. they also have to show the one year sales history for each comparable. also for the subject property they have to show the one year listing history.
it’s interesting sometime to show the sales history for a house in southern calif. it may have sold in 1990 for $300,000, 1995 for $225,000 and 2000 for $300,000. doesn’t hurt to remind a lender that what goes up sometimes goes down as well, lol.