A recent common complaint of my fellow Realtors in Hernando, Pasco, Pinellas, Sarasota, Orange and Citrus Counties of Florida is that “lowball” appraisals far below contract prices are killing many contracts.
Although pre-owned home sales rose slightly in May — posting the first back-to-back month of increases since the fall of 2005 — the 2.4 percent increase was less than expected from a previous rise in pending sales.
Many contracts failed to close in May because of poor appraisals kept buyers from getting a mortgage.
Local rumors of appraisal irregularities have been swirling from all across the county. Some mortgage lenders are employing appraisers who are not familiar with our very diverse neighborhoods of Spring Hill and Brooksville Florida for example, or who compare traditional homes with short sales and foreclosures.
Sales of new homes were virtually non-existent in May, and one of the reasons limiting sales of new homes was the use of foreclosures and short sales as a comparable and the affect on appraisals of nearby existing homes.
Because many appraisers cannot see the interiors of homes that are used as comparables, appraisers may not be aware of major deferred maintenance issues or damage that are rampant with foreclosed properties. The failure of appraisers to adjust comparable values of bank owned and short sales often results in the undervaluation of new homes.
This is Jaz Zydenbos saying Happy Trails to you until we meet again.
Jaz Zydenbos, Tropic Shores Realty, 352-263-6385, jazzsold@tampabay.rr.com
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