All Forum Posts by: Michael Hutchinson

 As a lender, you can ask your lender to push appraiser for a reconciliation of value.  The lender has to work with the realtor to determine an argument as to why the appraiser is wrong.  If you make a good argument, you can pull up the appraisal assuming the appraiser is not a jerk.   Things I look for if I am going to argue the appraisal:

- Find better comps. Generally, in my area, the appraisers try to look within 1 mile and over the past 3 months for sales. If there is something unique about the property, you can push them to expand this limit and/or if you get a better comp that is just outside of the range. An example of reasons I have broadened the date or distance range included: Basement vs no basement, ranch vs 2 story property, maybe mine had an ADU vs the other comps didn't and finally I added some value once because of a small body of water.

- Did they get the measurements right?  Sometimes you can find conflicting measurements if the seller measured first.

- Past appraisals - Sometimes the seller has already had it appraised or there were past deals where it appraised higher.   Could be a source of comps there.

- Distance to comps - Some appraisers use map programs and they measure distance by drive time.  I had one where it was about 300 yards away, but through the woods and over a creek.  They claimed my comp was 1.2 miles away and I showed it on google maps to be just yards away.

Be creative and use your lender/realtor if you have good ones. 

 We are seeing borrowers focus on using tools like Seller Credits.  With rates high, points are often needed to cashflow properly.   Appraisals have not been coming in low, so using a seller credit can reduce cost and increase net worth over time.   They key to it then is Nicole's point, buy it right.

As an example of a deal we closed last week:

- $360k purchase, but offer was raised to $369k with $9k seller credit to offset points.

- Impact was $288 a month more in cash flow and a net worth gain of $15k over 15 years if the borrower doesn't refinance or sell.  

Buy right, get good advisors and be creative (though above is a pretty basic strategy, but effective).

 Lots of third party sources to some aggregation.  ycharts, nerdwallet, etc.  I like this one on mortagenewsdaily because I can configure date range and see a high level product type.  

https://www.mortgagenewsdaily....

 I don't lend in PR, most lenders don't actually.   Here is a good site with some tips and several lenders that I pointed someone to who had the same question.   https://relocatepuertorico.com...

I sent my friend to Sun West who also does it.  I think the only advice I could give is be sure to state up front in each inquiry where you are buying.  Most lenders won't lend there for whatever reason.    Good luck!

Just wanted to start a conversation with a few folks on the pros/cons.  I am debating having both, but doing the lending side.  Seems like a great way to meet more realtors at conferences and such.  However, I plan on focusing on the lending side.   

Anyone do both?  If so, pro's and cons of doing so?  Feels like access is greater to build a business with the license due to access to certain events and greater knowledge.  However, I am worried realtors might see me as trying to poach relationships (would never do).    How would it be received if you didn't already work with the lender?   Helpful or threat or other?

In NC/SC, I see it as leveling.  It is a house by house situation.  We see houses going relatively fast if priced well and sitting/price reductions if not.  I am on the lending side and typically tell my customers that if it has been on the market for 2 weeks, they will make you a deal.  We see those deals often now in seller credit and not in price reductions (unless poorly priced).   Good conversation though, fun read. 

I think they smooth down some.  FYI, I am a lender and there are 3 trains of thoughts that I typically hear bantered around: 

1)  We enter recession - Traditionally, rates fall in this scenario

2)  Inflation continues, Fed keeps on hiking rates and/or black swan event like Russian tactical nuke - Rates will rise again if things feel out of control and the fed raises the fed rates.

3)  We kind stay where we are economically - This should drop rates.  The traditional relative risk when comparing the 10 year treasury and 30 yr mortgage rate is 1.7%.  It hit almost 3% and is moving back down now.  That is key to the recent drop in rates.  If that continues, you should see additional compression in rates.   Chart on this rate spread below to help see the volatility.  

https://www.blackknightinc.com... 

I plan to attend as well.  Looking forward to it.  Thank you for leading!  

 Correct post below.  Yes it can.  Any residential can be a primary or secondary property.  I would talk to a few lenders and have them pre-underwrite you.  Easiest way to make sure you will get it through their systems.  There should be no charge for this and you can lock on the lender of your choice.    Good luck!

 Thanks.  I will look at the exchange.  Good idea.   Not sure on valuation and how the bank will look at it.   I was using the included:

https://www.omnicalculator.com...

Not sure how the bank will view it though.   Numbers are:  $67k gross, operating expenses at 31%, I plugged a vacancy of 5% (but will have to look) and guessed they would use a cap rate of 5%.  That shows over $850k.  No idea if this is how the bank will do it though.