Foothills Insider News, March 4th, 2008

One way or another, but home buyers and home sellers seem to always have problems with the appraisers, and so do real estate agents. In the midst of real estate boom, when Tucson home prices were literally going up every day, appraisers used 6 months and even 1 year old (in some cases) data. This created a lot of controversial situations, with some homes appraised at 90% or less of the contract price. One might argue that this was done to protect both buyers and lenders from overpaying for the property. In reality, many buyers still went ahead with the purchase of the appraised property, taking 90% or even 100% loans. Some of the buyers ended up using private financing, lines of credit, maxing their credit cards or bringing to the escrow table all their life savings. As such, low appraisals have rather forced them into trouble, instead of protecting from it.

At today’s Long Realty meeting there was an announcement that from now on the appraisers will be allowed to use only 3 months sales history and not 6, as before (why didn’t they do it back in 2005?). In my opinion, this creates a serious hazard. In the current real estate market environment, any foreclosure in the neighborhood will have an immediate strong negative impact on all other homes in the area. This in turn will erode homeowners equity in the house and increase the number of short sales and foreclosures. The vicious circle will continue spinning, affecting more and more homes… It is easy to see who will suffer from the upcoming change and much harder to see who will benefit from it. Probably the appraisers themselves, charging multiple buyers for a low-ball appraisals of the same homes.

This post represents the opinion of the author and do not necessarily reflect the opinion of other Long Realty’s real estate agents, brokers and management.

Here are the properties on tour:

MLS #:20802712: 2230 N Wentworth Rd, Tucson, AZ 85749. La Cebadilla Estates. $1,750,000.
MLS #:20807052: 10252 E Shady Rock Ln, Tucson, AZ 85749. Tanque Verde Trails. $635,000.
MLS #:20805889: 9970 E Mount Pleasant Dr, Tucson, AZ 85749. Catalina Del Sol. $520,000.
MLS #:20808412: 6114 E San Cristobal, Tucson, AZ 85715. Country Club Estates. $799,900.
MLS #:20806716: 2920 N Cardell Cir, Tucson, AZ 85712. Monte Vista. $239,500.
MLS #:20803167: 4137 E Bermuda St, Tucson, AZ 85712. Catalina Farms. $160,000 – $180,000.
MLS #:20806177: 2827 E Monte Vista Dr, Tucson, AZ 85716. Miramonte. $300,000.
MLS #:20809161: 1824 E Spring St, Tucson, AZ 85719. $299,000.