Schaumburg, IL

FHA Appraisals and the Rules

Lately in my area there has been a tremendous amount of miscommunication and misinformation with FHA appraisals. It is so rampant in our area that I've decided to post the drama.

Schaumburg IL - Townhouse listing of mine does not appraise out and is $5000 under contract price. Seller does not want to sell at the appraisal price and the buyer doesn't want to pay the contract price. Deal dead which is easy enough. Buyer #2 comes along with their overzealous buyers agent, let's call her 'Gloria Go-Getter'. She's overcaffinated, overconfident, never listens to what is being said and is constantly on her 'crack berry' answering those important emails. Buzz, buzz, buzz, there she goes.

After negotiating this new offer at the appraisal price (I surprised her with that BTW) she said, sure I guess we'll use it. You guess? Sorry Gloria, the appraisal is good for 6 months on the property so yeah, we're gonna use it. Then the contract goes to the also overcaffinated loan officer, 'Busy Bruce', who begins the conversation with - "You don't know what you're talking about, I want a new appraisal done". So now we have Gloria Go-Getter and the loan officer telling me I am blocking the contract by not letting a new appraiser into my listing.

Now I'm thinking to myself, this can't be happening right? This FHA appraisal guideline is as old as dirt, how can they not know about it? Well it turns out that the loan officer wanted me to manipulate the FHA system that assigns the appraisals and case numbers. The loan officer is telling me that the appraisal no longer has a case number and they don't want to use it. Well I get the original appraisal from the original loan officer and indeed there's that case number and all the appropriate information necessary to make it valid. Hmmmm.

Did the buyers agent and the loan officer plan this? I think that having the appraisal already done was not in their collective game plan. I think what they expected was that the townhome would not appraise out and the price would be adjusted downward. Their only option was to fight the current appraisal. Problem is, we can't just get another new FHA appraisal on a property and I wasn't going to do anything funny with the FHA assignment system.

Besides, I've heard that the federal penitentiary accommodations would not be adequate enough for little 'ole me.

I've uncovered some interesting things from the FHA Help Line (FHA Connection) and they were very courteous and answered all my procedural questions. I wasn't loosing my mind and indeed the appraisal was still valid and in the system. Why all the drama? Was I just supposed to forget about the 1st appraisal? Why would I just ignore it?

What would the penalty be if I did turn a blind eye? So the deal finally closed and I can honestly say I'm not sure what this agent was trying to accomplish. All the way to the end, she was adamant that we didn't have to honor the appraisal.

I'm not gonna miss Gloria Go-Getter.

FHA Appraisals

Well here's a kick in the head ......

I recently cancelled a listing that I had for some time because the seller just would not lower the price. All the signs were that since she didn't have a fireplace, she was being overlooked at her price. Townhomes with fireplaces were getting regular showings and this one didn't have a showing in 30 days! We had to adjust our price for wanted features that we didn't have.

Seller said no way, they can just make an offer as we've all heard that before. "Lowering my price won't make a difference and everyone knows they can just make an offer in this market."

Well, as always I check the new listings everyday in the MLS and who should appear? Ms. I won't ever reduce my price! Here's that kick in head - she's $13,000 lower than I had it. I'm quite sure at that price, it's going to sell right away. Now at the new price it's below the current market value and with the newer carpet she put in, I'm confident an offer will be in her hands soon.

But, what was all the fuss, fighting and digging in her heals all about? I was only looking for $2000 to bring her more in line. I'd have to say the other agent was a better sales strategist than myself because she got the job done and got the seller down below what she needed to be at. She did a great job.

I'll certainly be putting it on my list for future showings. Just don't understand what Ms. Seller was thinking here? It cost her alot of valuable market time.

The 3 Things you should know about Price ~

What’s the most asked question that I receive from people about real estate? What’s the #1 tip that I could pass along?

Well there’s actually 3 things that are enmeshed together – Price, condition, location. All 3 actually make your home either sell or be rejected by prospective buyers.

Price - Obviously in this market with the elevated inventory you have to be ‘spot on’ with your homes price. Too high and no one will take your home seriously and it will be passed over. Too low? Well that really doesn’t happen too often except in distress sales, foreclosures and the like. A fair price – what a seller is willing to accept and a buyer is willing to pay. That’s what we normally strive for.

When an agent puts your home on the market, it has to be sold three times.

The first sale is to my peers, the other REALTORS® and agents who are in the market everyday. They need to be excited about the price or they simply ignore the listing because it's often a waste of their time to show it to buyers who won't pay that price.

The second sale is to the buyer, and they compare your home to the others they're looking at in the marketplace comparing features and benefits that are important to them.

The third sale is to the appraiser for the lender. Even if we're lucky enough to get a higher than market price from a buyer, the appraiser compares the sale with past sales in your neighborhood and their appraisal usually hits right at the market price.

Now let’s think about this question for a moment - if you bought a home and the appraisal came in lower than what you paid, what would you do? How would you feel as a buyer?

I'll tell you what normally happens from past experience, the deal falls through and we begin the whole process all over again. Start again at square one, we’re back on the market baby! How would you feel about that?

Be sure your home is set at a competitive price. Remember the ‘3’.

Lyn Sims (847)230-7324 RE/MAX Suburban

The 3 Things you should know about Condition
The 3 Things you should know about Location

I proudly serve and sell real estate in the Northwest Suburbs of Chicago. If you are thinking about purchasing or selling your home in the communities of Schaumburg, Hoffman Estates, Elk Grove Village, Roselle, Palatine, Medinah, Itasca, Bloomingdale, Carol Stream, Bartlett, Hanover Park, Streamwood, Elgin, South Elgin, St. Charles and more importantly, want to work with a local area expert, contact me immediately.

All data and information provided on this blog is for informational purposes only. Lyn Sims makes no representations as to accuracy, completeness, correctness, suitability or validity of any information on this site and will not be liable for any errors, omissions, or delays in information or any losses, injuries, or damages arising from it’s display or use.

Home Selling Advice on Price ©2009 Lyn Sims - RealEstateConsumerInfo.com

Schaumburg Real Estate

Dennis Toomey continuously monitors local real estate statistics to keep his clients informed and ahead of the real estate trends. Below, at the end of the page you will find Schaumburg real estate statistics for the last 12 months as of November 6, 2009.

To find the value of your home with a free, over-the-net home evaluation, please visit: www.KnowYourHomeValue.com/active or use this link http://www.knowyourhomevalue.com/remaxil/modules/global/forms/marketevaluation.asp?&acc=32722&s=active

If you would like a free list of homes for sale in this area/neighborhood or would like more information about Schaumburg, please visit: www.GetYourRealEstateHere.com/active or use this link http://www.GetYourRealEstateHere.com/remaxil/modules/agent/agent.asp?p=findahome.asp&page=search&selected=qck&mode=N&acc=32722&s=active

Dennis Toomey

RE/MAX Territory

847-338-0180

http://www.housebyzip.com/

dtoomey@remax.net

Schaumburg Real Estate Market Conditions

Market Statistics CriteriaStatus: Active, Back on Market, Contingent, New, Price Change, Re-activated, Temp Off Market, Pending, Closed, Expired Property Type: Detached Single, Attached Single Area: Schaumburg Months Back: 12 Months

Active Listings

Detached Single

Bedrooms # Active Avg. LP Avg. MT All 200 $394,270 220 2 or Less 2 $244,175 43 3 96 $287,362 180 4 83 $448,403 249 5 or More 19 $713,756 316

Attached Single

Bedrooms # Active Avg. LP Avg. MT All 505 $189,250 191 None 1 $115,000 47 2 or Less 395 $170,392 189 3 109 $258,271 199

Off-Market Listings

Detached Single

Bedrooms # Sold % Sold Avg OLP Avg LP (Sold) Avg SP SP:LP Ratio SP:OLP Ratio Avg MT (Sold) Avg LP (Unsold) % Expd All 231 71% $367,001 $325,320 $307,504 95% 84% 152 $417,220 25% 2 or Less 0 0% $224,900 $214,450 50% 3 133 74% $301,112 $271,857 $257,567 95% 86% 143 $321,972 23% 4 89 70% $438,172 $383,523 $362,988 95% 83% 159 $503,792 27% 5 or More 9 60% $636,887 $539,822 $496,778 92% 78% 222 $682,633 40%

Attached Single

Bedrooms # Sold % Sold Avg OLP Avg LP (Sold) Avg SP SP:LP Ratio SP:OLP Ratio Avg MT (Sold) Avg LP (Unsold) % Expd All 407 60% $195,289 $181,300 $172,153 95% 88% 150 $191,390 30% None 0 0% $116,500 $109,900 100% 2 or Less 329 60% $177,848 $168,272 $159,724 95% 90% 152 $169,904 29% 3 76 63% $266,509 $232,615 $221,067 95% 83% 142 $295,151 32% 4 2 67% $357,933 $374,400 $358,000 96% 100% 82 $309,000 33%

Some of the subjects covered:

* Roles of the Lender/Mortgage Broker
* Credit
* Pre-Approval
* Roles of the Real Estate Agent
* Searching for Properties
* Contracts
* Negotiation
* Closing

Class Location: Schaumburg, IL
Starbucks at the Streets of Woodfield, 601 North Martingale Road, Schaumburg, IL

• Wednesday, November 4th at 6:30 p.m.
• Saturday, November 14th at 9:00 a.m.
• Thursday, November 19th at 6:30 p.m.