2011 May 12th

Hoboken Property Values – What if the Appraisal Comes in Low???

A Common Problem in Hoboken Real Estate Sales

Here is a situation that has been popping up recently.  A Hoboken property gets listed for a certain price, let’s say $700,000 for the sake of simplicity.  It’s a really nice condo in a great location with 3 big bedrooms, some wonderful features, maybe a yard or nice terrace or a view of the city.  Buyer comes along, then another, finally several buyers make offers (it happens more than you realize, even today).  The price goes over asking – a buyer wins the bid and $730,000 is the purchase price.  The buyer plans to put down 20% and finance the balance of the purchase price.  We get through attorney review with no issues and the buyer applies for his mortgage.apple

The bank orders an appraisal.  The appraiser has very specific rules about what can be considered in determining value.  The comparable sales do not support the purchase price. The appraisal comes in at only $650,000.   Now what???  This if the fun part – not.

In the past few months I had one deal where I was the listing agent and the property did not appraise.  The buyer and seller renegotiated.  (The sellers had little choice as they were in contract to buy a new home themselves and didn’t want to lose that property).  This was one of those multiple-offer situations.  I honestly believe that the buyer bid high knowing in the back of his head that if the appraisal came in low, he would back off his offered price.  It was not a pretty scene.

I recently was involved in another deal where I was working with a buyer interested in a high-end property.  Again, there were multiple offers.  My buyer made a full-price offer even though we all knew that the appraisal was going to be an issue from the start.  The buyer wanted the deal to be contingent on the appraisal.  The seller wouldn’t hear of it.  The deal fell apart.  Of course, any other buyer who is interested in that property is going to have the same concern and the seller is going to be right back in the same situation.  I guess there may be buyers out there who don’t care that the appraisal is low.  Maybe they are paying all cash and never plan to sell or think the market will recover sufficiently before they do sell so that it won’t matter.  Most buyers are going to be very nervous and have second thoughts when they are setting prices at the upper limit and then get that low appraisal.

Finally, there is the complication of short sales, foreclosures, desperate sellers and seller’s concessions.  All of these cause low sales prices.  Those closed sales become the comps that will be used in appraisals of similar properties.  If you are buying (or selling) in a building like the SkyClub, where there have been a number of short sales, it’s difficult to support a high price with the comps.  For an interesting debate on the subject of whom is to blame – the realtors who pushed for high prices during the boom, or the appraisers who now take the blame for low appraisals that keep sales prices down, you might enjoy this thread. Even with all the new regulations, the problem is not going away any time soon.

Posted by Lori Turoff | Currently 12 Comments »

2011 Apr 13th

The Weekly Wednesday Wrap Up – Hoboken Condo Sales & Activity for the Week of April 13th

Hoboken Condos Sales & Activity – Week of April 13th, 2011

Almost every day someone asks me “how is the market doing“?  To me, the answer if pretty clear – prices are still headed downward.   barrel
Which is why it always amazes me to see sellers asking for what they paid for their condo back in ’06 or ’07 without having done any real renovations or other work to justify the price.  Even if they were to be so lucky as to get a buyer to bite, what do you think is going to happen when the appraisal takes place?  The property doesn’t appraise and the sales price gets renegotiated because the bank won’t make the loan.  When that does happen,  the sellers are in a bind.  They’ve taken their place off the market, probably committed to buying another residence and have made plans to move on with their lives.  The buyers have them over a barrel.

Here are the March 2011 Hoboken condo sales results:

Here is this week’s condo sales report:

Disclaimer: The data relating to real estate transactions on this web site comes in part from the Hudson County MLS. While some of these listings are, in fact, our listings they are not ALL our listings nor do we hold them out as such. Century 21 Listings are identified with “C21” after the address. Other listings are from the MLS and are identified with “MLS” after the address. Information is deemed reliable but not guaranteed.

Studio & 1 Bedroom Hoboken Condos:

21 new listing

3 Dabos

1 Sold

5 price reductions

151 Total Active 1BRs

Two Bedroom Hoboken Condos:

20 new listings

9 Dabos

5 sold

11 price reductions

191 Total Active 2BRs

Three Bedroom and Larger Hoboken Condos:

4 new listings

1 Dabo

1 Sold

3 price reduction

38 Total Active 3BRs

Hoboken Condo Open Houses

If you are in the market for a Hoboken condo, our Hoboken Open House Google Map is your best source for locating every open house in Hoboken. It is the single, most complete listing available and we were the first ones to do it. We compile the information by hand from all possible sources to provide you with all the information you need in one spot. It’s posted on Friday every week.

Want to Receive New Listings & Price Reductions Daily?

If you would like to be eee new listings and price reductions each weekday in either 1br, 2br or 3br categories just email us at [email protected] letting us know which size(s) you would like and we’ll add you to the  list.

For more information you can always contact us at 201 993 9500.

Thanks for reading and, as always, we welcome your comments!

Posted by Lori Turoff | Currently 2 Comments »

2009 Sep 29th

Problems with Hoboken Appraisals?

Appraisals & Valuations – a Hot Topic in Real Estate Sales

There was a very interesting article on the cover of this week’s real estate section of the New York Times.  In brief, appraisals in New York city are often coming in too low because they are being done by appraisers from out of town who don’t know the local, urban markets and tend to undervalue properties; and there are not enough comps to substantiate the prices because there have been so few sales.  This is an issue in Hoboken, too.  Appraisers unfamiliar with the area may not appreciate the difference in location between Hudson Street and Jackson, or the benefits of a second bath in a two-bedroom apartment.

When an appraisal comes in too low, the buyer can always bring more money to the table – assuming they have the money.  It’s ironic that when Hoboken condo prices were rapidly appreciating at the height of the market there was a similar problem.  The comps couldn’t keep up with the sales prices.  Now a down market has caused appraisals to again be the center of many buyer’s and seller’s attention.

Posted by Lori Turoff | Currently 14 Comments »

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