Pinetop White Mountain Blog

Good Afternoon Everyone,

The 4th of July Holiday Weekend is almost here.  How are you going to spend your Holiday?  As a Real Estate Agent I will be working, hopefully selling a few properties, and if I get lucky perhaps I'll have a little time to take in a fireworks show or check out the Arts Fairs in the Community.

Before the celebrations begin however, I thought I needed to address the sellers out there who are hoping a buyer shows up at their house this weekend.  Be prepared for a reality check!  No matter how much we love our properties and no matter how much we say to ourselves we are not coming down on price, the reality is you probably will if you want to sell! 

If you want to sell you will have to face the fact that the Appraisal is going to tell all.  Appraisals are coming in low.  There is no way around it because the market is dominated by foreclosures and those foreclosures are the only comps out there.  Appraisers can adjust a bit on the foreclosures but if there isn't anything else in the market to compare to they have no choice but to use them as comps on their appraisals.

I had a long conversation yesterday afternoon with an appraiser.  He told me that the guidelines they are being forced to follow by the lenders are putting constant downward pressure on values.  They have made it difficult for appraisers to give a true valuation on a property because they won't allow them to do much adjustment on the foreclosure values.  The lenders have implemented such strict guidelines on appraisals that appraisers have no choice but to use the foreclosures as comps.  What that does is keep the downward pressure on values and it keeps the banks in the Real Estate business. 

Banks don't want to see the market recover because as long as they can keep pushing the values down through tough underwriting standards and appraisal guidelines, they can continue to dominate the market.  The Foreclosure Market is their golden cow and they are going to keep milking that cow for as long as they can.  They can sell their bad assets off at a loss but they are making up for it in volume.  They don't have as much risk on the sales because the values are lower and if they can make the buyers put more skin in the game to buy their assets they can sell those assets off to the investors and make a huge profit on them.

The reality for retail sellers is that you are getting hammered and you are going to keep getting hammered until you decide to give up or settle for what you can get for your house.  Many have made the decision that they would rather walk than take the loss, but all that does is keep the Banks in the Real Estate Business.  You walk, you lose, and the bank wins.  They don't care if you walk, you aren't hurting them, you are just giving them one more way to keep driving values down down down.  No matter what, they are going to come out just fine and you are the one who is going to suffer.  

The bottom line here is you as a seller need to make a decision about whether you want to be an owner or a seller.  If selling is the goal than the reality is you will probably have to take less than you want to sell your home.  It isn't getting any better yet and it won't until we quit giving the Banking Industry control of the Real Estate Market.

Enjoy your Holiday Weekend Everyone, be safe and be smart....Until next time!

Sandra Paulow, Associate Broker, GRI, SFR  (928) 242-0300