All Forum Posts by: John LaBelle

You need to be talking to your database on a regular basis. Try to talk to at least 3-5 people a day.

Call on For Sale By Owners

Call on Expired Listings

Volunteer to host open houses for other agents so you can get in front of buyers

I just listed a bank owned 3 family in Lowell. This property needs a lot of work, but has plenty of potential. If you want to learn more about it, give me a call or shoot me an email. There are a bunch of foreclosed 2-3 families in Lowell, so there is plenty to choose from if this area is of interest.

Good luck to you.

John LaBelle
RE/MAX Prestige

Andy, Ichiro, & Jurni

If any of you decide to venture north of Boston, I'd be happy to help you look for properties. I'm an appraiser a realtor. I know the Greater Lowell and Greater Lawrence areas quite well. I also cover southern NH. I just started working some REO properties as well.

Good luck, and welcome to the forum.

John

I know plenty of Buyers Agents who have their clients sign a contract which states a minimum fee for their service. Some do it by a percentage, and others do it buy a minimum dollar amount. If the listing agent's co-operating fee does not meet the minimum, the buyer is responsible for the difference. It isn't all that uncommon, and it make sense if you think about it this way. A true Buyer's Agent who is negotiating in the buyer's best interest is in fact negotiating their own fee down. Say the list price is 200k and the agent gets the price down to 180k. If the fee was 2%, they just reduced their fee from $4000 to $3600. How many people do you know that are paid less for doing a better job?

As for the up front fee, I've never heard of it and would never pay it. Tell him you'll sign a buyer agency contract which will guarantee you'll go though him for a specific amount of time, but do not pay anything up front.

The bank will not negotiate a short sale with the owner. If he can find a buyer, that buyer can negotiate a short sale with the bank. The bank probably won't negotiate if the payments are current.

Letting it be foreclosed on will not be good for your buddies credit.

What state are these sites in?

I agree with the 5-10% statement. If it is a true arms-length transaction with the buyer and seller both being knowledgable about the market, then the appraisal should come in very close to the sale price.

However, there are many appraisers out their that just "hit the number" in order to make the deal go through. There are also plenty of us out there that do not. I have been appraising properties in Massachusetts for the past four years, and my values have resulted in deals being killed numerous times over the years. Yes, I've lost clients over it, but I don't care. I've spent a lot of time and money to obtain my certification, and I'm not going to toss that away for a few hundred dollars just to help a deal go through.

Here in MA, the market is declining in most areas and forclosures are on the rise. I will not be suprised at all to see some appraisers lose their licenses in the coming months and years. I've been hearing many instances of appraisers having their work from 2-3 years ago questioned because the property is now or soon will be in foreclosure. The skippies who were out there 'hitting the number" are going to find themselves in trouble.

I just find it odd that you guys don't think an appraisal has anything to do with market value. True, it is an "opinion" of value, but it is based on information from the market. The Buyer offers what is their "opinion" of what the property is worth. So in essence, everything is an opinion, until an agreement is reached and the deal is done. Once the deal is closed, we consider it a fact (or market value).

Yes I've lost clients over some of my appraisals. My feeling is if the client is going to stop giving me work, then that's a client I don't want to be associated with because they will probably get me in trouble in the long run. Here in MA, only the actual Mortgage Broker has to be licensed. The individual loan officers working for the broker do not, and many of the loan officers have no clue about the real estate market. For instance I went on an appointment a few weeks ago and the loan officer was there for my appointment. The owners had bought the property two years ago for somewhere around 340k (I don't recall the actuall number). The loan officer told me they had invested about 50-60k in renovations, so he figured it was now worth 400-420K. A dollar spent does not equal a dollar increase in value, plus the market is in a decline. I came in about 10-15k above the last sale, and all my comps were sales within 6 months. I would have had to use sales that were 12-18 months old to come anywhere close to 400k. While there are skippies out there that would probably include one or two of those old sales to increase their opinion of value, that's not a stretch I will make.

I ignore all estimates of values included on appraisal requests, and a good portion of my clients don't even put them on the order. The only time a look at the value is on a sale because I am required to review the sales contract. Many times the contract will include personal property (lawnmowers, TVs, etc.) and I am required to report that personal propety is involved in the sale. Those personal items are not included in my opinion of value.

I have also heard appraisers rationalize if someone is willing to pay a certain price, then that is the market value. But one must investigate the buyers motivations for purchasing that particular property. For instance, a while back I was appraising a loft style condominium unit in a new development. The buyers were paying about 20k more for the unit than any other unit in the complex. Keep in mind I had already appraised about 10 units in the complex. It turns out, the same buyer had already closed on the unit next door, and were planning on cutting through the common wall to make one large unit. They were overpaying, because they needed that unit to complete their plans. I came in lower than the sales price, explained why, and the lender agreed with my value and the deal still went through.

Appraisers are not employees of the lender. We are independent third parties who give the lender our opinion of the value of the property. The lender uses our report to decide if the loan is woth their risk. Appraisers don't kill deals. The lender has the final say in who they loan money to and who they don't.

Real estate fraud is all over the place, and one must beware.
Check out www.flippingfrenzy.com for some interesting articles.

Where in the world did you come up with that?

The following definition can be found on all of the standard FNMA appraisal forms:

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus...

In an appraisal, the appraiser gives an Opinion of Market Value. Therefore, the appraisal is representative of the market value.

Appraisers have three approaches to determine value, although all three are not always used depending on the property. There is the Sales Comparison Approach which is based on similar recent sales, the Cost Approach which is based on a value of the land and the cost to replace the existing improvements minus depreciation, and the Income Approach which is based on market rents and a Gross Rent Multiplier which is detemined through market research.

Your other statement that banks will appraise the property right around the sale price even if the price is 200 and it's worth 500 is really disturbing.

First, banks don't appraise anything. Banks hire appraisers who are independent third parties with no interest in the property being appraised. Second, if you know of a transaction where the property was appraised lower or higher than the value and this was done on purpose both the lender and the appraiser should be turned into the authorities. That's a little thing we like to call FRAUD.

Have you tried a local bank or credit union?

where are you located?
What sort of training and support do you provide?