House Valuation.

BirmanBuilders

After speaking with a buddy of mine yesterday over a few beers he told me what a recent bank appraisal ofhis came in at. He has about 500k in his house and i'd safely say a value of 625k. We both know the numbers for his area and the 625 is good value for money. He was trying to refinance his loan and the bank sent an appraiser out and gave him a "value" of 340k. This was based on market activity which was a house that was foreclosed on around the corner. This house had all fixtures, plumbing, electrical, removed. Kitchen taken out and trashed. So in the banks infinite wisdom declared his house to be only worth 340. Based on this I am planning a trip to my local car dealership and plan on buying a Porsche for the same price as a banged up Escort.

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AutumnWood Inc.

It seems it only works in the banks favor ....

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Bodger

Banks are so scared of loaning money right now they'll say anything.

I'm remembering now how many offers I used to get in the mail for a business line of credit for $100,000.
Now that I actually need it, they won't look twice at me.

cleveman

Soon there won't be any comparables out there for appraisals. If nothing sells in the area in six months, what will they use?

simplejack

Check out Zillow.com they usually run a bit on the high side, just enter your address and they'll throw a number at you for what the house might be worth.

Nearly 50% drop sounds nuts especially if he's got 500k worth in it!

BirmanBuilders

My buddy is a builder and developer, and the 500k that is in it was done with all his usual subs and for discounts, being that he has given all of them a lot of work in the past. You know how it goes. Some of you might not agree with that, but if i've had a half million dollars of work off someone over the last few years, I would be definitely doing some favours when it comes to their own house. At least he had the sense to throw the "valuation" back at the bank and ask what they were smoking?

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Gary H

I had a house sold it for $120,000. They lost it to the bank last winter. The bank is trying to sell it for $40,000. And there is nothing wrong with it. In may area houses are going for about half the value they were before. And the reason is there is no work here. The big plants have cut back and people lost a lot of jobs. If we get our two coal plants going then this area will change from jobless to we need all the construction help we can get.

BirmanBuilders

Thanks for the heads up but these guys are smoking crack as well. The million dollar house next door is apparently worth 310K on zillow!

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gallerytungsten

It's called supply and demand. Demand is low, supply is high, and the days of "liar's loans" with "no credit check" are gone (at least for now.)

The value of the materials is...immaterial, in this case. While the intrinsic value to your buddy is $625k, the value that the bank is willing to risk loaning on in the present economic climate is obviously different.

No doubt things will change in the future.