I am starting this new category of “in my opinion only” because what I will write under this category will have no factual evidence (unless I cite any) but merely will be a channel to express some of my opinions that are smothered elsewhere.

I recently had a transaction that was in escrow in the $700,000’s price range. The appraisal came in over $100,000 less than the escrow price. The buyer was using Wells Fargo banking services..if you could call it that.

The buyer wanted a discount on the “agreed to price” in escrow. The sellers didn’t feel the price should be adjusted because the buyer clearly wanted the property at the agreed upon price in the beginning. The sellers made a very good point that I do agree with:

THE VALUE OF A HOME IS WHAT A WILLING BUYER WILL PAY FOR IT. NOT WHAT A BANK APPRAISES IT FOR . THE BANK IS APPRAISING THE HOME WITH THE VALUE IN MIND IT IS WILLING TO LEND ON THE PROPERTY.
 
We must keep in mind that banks and appraisers are reacting to the reprimands that have been administered by government for previous lax in lending practices. Now they are over correcting to the conservative amount. This is no more than a reaction from the bank. Now everyone is paying for this by properties not appraising at values a buyer has put them in escrow for!
That sad part of this story is shortly after, two other units sold very quickly for a much higher price. The buyer came back to us and asked to buy the property at the originally agreed upon price after the other two closed. It was too late, the sellers had changed their mind on selling, the buyer didn’t get the property and the agents..including me walked away with nothing after a lot of work.
I don’t think this is what Obama was expecting in the reformation of the lending system.
This is only my opinion…..


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