Real Estate Appraisal Explanation from Quicken Loans

[llahnod1]

As an appraiser, I believe that this video, overall, presents a good summation of the appraisal process.

However, as other commentators have stated, foreclosures are not considered to be the same as other closed sales.

Foreclosures are usually valued differently, as they have the stigma of foreclosure. Also, owners involved in the protracted process of losing their homes are not likely to maintain and improve the property. Furthermore, REO homes are not warranted, nor are disclosures provided.

[TheEconn]

The girl and Quicken are wrong - a sale is not a sale. There are arms-length sales and there are distressed sales where the sale price reflects the owners being forced to sell. These sales typically sell below market values. If an appraiser uses a foreclosure sale to compare it to an arms-length sale then there has to be an "marketing" adjustment upward for the non-market distressed sale to reflect a normal market sale without duress. All sales are not the same.

[drzlecuti]

This is a nice, succinct presentation, but appraisers do not necessarily treat a foreclosure sale just like a non-foreclosure sale. One factor we must consider is "conditions of sale." If the seller is under duress, that would tend to reduce the price. Now, if there are a lot of foreclosures listed for sale, those would generally be treated like any other listing.

[RainwaterRealEstate]

@rhett2go Many people believe that, but it's actually wrong. Not all transactions are what we call "arms length". For example, your home is worth $200k but you are so desperate to sell that you would would sell it to me for $140k. That does not make the home worth $140k. It's still worth $200k based on market compairibles. Appraisals are generally required to finance a loan but you can usually contact a realtor for a free CMA if you want to know the real value. Check out my video on the subject.

[quickenloans]

Hello! Thanks for the comment.

We understand the point that you made, but a 3rd party, unbiased appraisal is the best to do when it comes to refinancing.