Banks Trying to Bring Down the Real Estate Market?
I have a multi-family property that went into contract back at the end of July. The building is a 4-family located in a very stable neighborhood in the outer boroughs. The buyer had already been qualified through his lender (bank-direct mortgage). The contract price was $750K. Ah, the appraisal! Now, as Realtors, we always know a property’s real market value. And this property was worth $850,000. The buyer was getting a deal! But that’s not what the bank said. The appraisal came back at $700,000. Are you kidding me!? The appraiser said that even if he appraised the property using real comps, and showed proof, the bank would knock it down, and threaten to drop his services as an appraiser. After several years of rampant, uncontrolled, ridiculous, and often illegal lending and appraisal practices (all of which got us into this burst market bubble!), suddenly some banks doing the extreme opposite - really forcing down the value of real estate, even in a city like New York, that has been holding its own.
Comment by Robby on 10 November 2008:
sounds like a paranoid and jilted broker complaining about a deal that didn’t go through because he believed his own lie about the property being worth 850k when the market is tanking.
Its in the appraisers best interest to make the deal match the appraisal and force the deal to go through so everyone can continue with their business. so the lender can loan the money and so the borrower can own the house.