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Suppose I list my home with a realtor at a certain price and then prior to getting offers I decide to keep the home as rental property and then refinance it. Should the appraisal to determine ltv ratio consider the listing price of the property or can they go for traditional coms analysis? My previous appraisal has been more than my current listing price and I think I could get another at higher price if they don't consider the listing price?

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi Campbell,

The listing price is only the seller's rough estimate of what he wants to get. He can price it high, low or closure to the market value. But in comparative market analysis you will get almost the actual market price. So in the appraisal comparative market analysis will get more priority than listing price

Thanks,
Larry

Posted: Fri Nov 02, 2007 2:22 am Post subject:

Hello Campbell,

I think the appraisal will attach more importance to the comparative analysis.

The listing price of the property also considers the comparative market analysis before setting the price for sale.

livinginnky · Posted: Fri Nov 02, 2007 10:44 am Post subject:

If you have recently listed your property for sale with a realtor, then the bank doing your refinance will strongly way that price in their value opinion. We see this all the time in this industry... a seller lists the property for a while can't sell and then wants to refinance at a higher value.

Think about it from the lenders perspective... you could not sell at the listing price so what makes it worth more?... if anything it is worth less. Remember that a bank strongly weighs the value based on what they can get if you are foreclosed on... if you couldn't sell how could they?...

When the appraiser gives his value he is also going to include that it was on the market for x amount of days at this price. If he is over that price he better have a rock solid explanation. And chances are the banks appraisal review is going to come back with the listing price or lower.

Always remember... lenders are out to make money and they base their decisions on the likelyhood of profit... they calculate risk based on the facts they have available, and if a house sits on the market for x amount of time without selling it is logically worth less than that listing price.

mikeshapiro · Posted: Mon Nov 12, 2007 6:03 pm Post subject:

Eric explained that perfectly. If it was on the market for full a marketing exposure time and it couldn't sell than do not expect the appraisal to be at that price or higher.

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Should appraisal consider listing price or comps analysis?