Appraising my own house

[Steve Horrillo]

From what some realtors have been telling me, is that houses aren't

appraising for what you can sell them for in a hot market (eg. Florida)
The appraisals are coming in much lower that the seller wants to list
the house for.
IS THIS THE SIGN OF A BUBBLE??

Ever since I've been in the biz this has always been the case. Doesn't
everyone like to think the sale of their home is going to solve all their
financial problems. Not to mention the emotional attachment. A mother of the
most ugly baby thinks the child is beautiful as well. My experience has
shown me that If you expose the home to enough buyers for a long enough time
you are always going to someone who is willing to pay above market value and
put enough money down to make up for the low appraisal. Especially when the
Press is feeding the frenzy. When a home sell over market value that raises
the bar for everyone else. The only difference I see in the past couple
years is that people want to buy a home with little or no money down. Banks
are getting progressively generous/risky in their lending practices. Second
loans to cover the down payment is getting easier too. Once the Banks are
told to tighten up and/or interest rates rise sellers will no longer be able
to get above market value. Which means selling the home will no longer pay
off the credit cards, second and third mortgage. So of course foreclosures
will increase and prices of homes will drop. Rental rates as a consequence
will increase. But since it will be harder to get a loan once the banks
tighten up the one's with good credit or cash will have a party. Yet I don't
feel there will be any real sharp changes because everything that happens in
Real Estate seems to happen in slow motion and varies from area to area.
Also I suspect that the realty market is being used to keep the stock market
out of crisis as well. A hotter stock market will be an indicator of a
heavier real estate decline as well.

In a nutshell, tighten up on loans, raise interest rates, start cracking
down on appraisers and home prices must fall.

Anyway, that's my take on it. But I've only been in the biz for 5 years. I'd
like to hear what some of the investors and brokers who have been in it for
a couple of cycles.

[Bryan Cooper]

I'm am an investor. I've been looking at real estate for about 8 months.
So far, I've found one property that makes sense. I bought it. While the
market is hot, it's like any market, as long as the investment gives me a
decent return on my money, I'm in. This house will give me a 10% return on
my investment year 1 and better as time goes on. Not bad for the market
highs. There are always deals to be found! There are a lot of people that
want to invest, but, get frustrated because it takes time to find deals that
make sense.

Some of your analysis on money is true, but, that's for people who rely on
banks and mortgage companies for their money. As an investor, if I find a
great real estate deal that makes money, the money finds me (case above).
As for the values declining, let them decline. I'll still make better than
10% on my money. I would call that a buying opportunity!

Post by Steve Horrillo

From what some realtors have been telling me, is that houses aren't

appraising for what you can sell them for in a hot market (eg. Florida)
The appraisals are coming in much lower that the seller wants to list
the house for.
IS THIS THE SIGN OF A BUBBLE??

Ever since I've been in the biz this has always been the case. Doesn't
everyone like to think the sale of their home is going to solve all their
financial problems. Not to mention the emotional attachment. A mother of the
most ugly baby thinks the child is beautiful as well. My experience has
shown me that If you expose the home to enough buyers for a long enough time
you are always going to someone who is willing to pay above market value and
put enough money down to make up for the low appraisal. Especially when the
Press is feeding the frenzy. When a home sell over market value that raises
the bar for everyone else. The only difference I see in the past couple
years is that people want to buy a home with little or no money down. Banks
are getting progressively generous/risky in their lending practices. Second
loans to cover the down payment is getting easier too. Once the Banks are
told to tighten up and/or interest rates rise sellers will no longer be able
to get above market value. Which means selling the home will no longer pay
off the credit cards, second and third mortgage. So of course foreclosures
will increase and prices of homes will drop. Rental rates as a consequence
will increase. But since it will be harder to get a loan once the banks
tighten up the one's with good credit or cash will have a party. Yet I don't
feel there will be any real sharp changes because everything that happens in
Real Estate seems to happen in slow motion and varies from area to area.
Also I suspect that the realty market is being used to keep the stock market
out of crisis as well. A hotter stock market will be an indicator of a
heavier real estate decline as well.
In a nutshell, tighten up on loans, raise interest rates, start cracking
down on appraisers and home prices must fall.
Anyway, that's my take on it. But I've only been in the biz for 5 years. I'd
like to hear what some of the investors and brokers who have been in it for
a couple of cycles.
--
Warmest regards,
Steve Horrillo, Realtor | Trainer | Hypnotherapist
http://brokeragenttraining.com (Advanced training for real estate
professionals)
http://over100percent.com (Realtors earn over 100 percent)