Hello,

I am currently looking at my options with respect to my one bedroom condo and a growing family that can no longer fit :) The property is underwater, and one of the options I'm considering is to sell the home for less than I owe but covering the difference out of pocket. To fully evaluate this option I would need a strong valuation of the home's worth.

From looking around online it seems that the general feeling is that while appraisal services will give you a high granularity detailed breakdown, Realtors have a stronger sense of the 'people' side of the equation...i.e. what people in today's market are paying and would be willing to pay for your property.

Obvoiusly if I were to choose an Agent to handle my listing they would be doing the evaluation as part of the job and being paid for their work with the commission...but if i'm not looking to hire an agent to sell my property at this time, I don't imagine they'd want to spend much time on valuing my property. Will they do this service for a fee? Or do they actually still do it, hoping that when you do sell you will choose them as your agent?

Any advice would be helpful... thanks!

Realtors can and do provide this service (but probably not all of them). I would talk to several in your area. You might arrange to just pay for a report. Some agents might give you a credit for the value of the report against a commission, should you decide to list it at a later time. On this forum, you will likely find that we agents think we can do just as good a report for you as an appraiser, at a lower fee. Appraisers would likely disagree with us.

It would be best to wait until you are ready to sell before you get a market valuation. Your home might be worth less by the time you decide to put it on the market.

You can do a little research yourself on sites like Realtor.com, Zillow, Trulia, Redfin, ZipRealty.com, etc.

Thank you both for the help. BK Estates- you bring up a good point with the value of the home changing in between now and when I decide to sell...

Ultimately I don't believe i'd wait THAT long in between, it's just that this information would be a determining factor in whether or not I choose to sell. So if the market value ends up being TOO low, I may not be able to afford paying off the difference in which case there would be no sale and the Realtor wouldn't end up getting a listing. That's also part of the reason I mentioned needing a "strong" evaluation, as I need to be farily confident in the number... I hear about zillow often being off by a significan't amount, so I'm not sure that's what I'd want to base my decision on.

I have a few observations; having done just a few valuations and recommended several Appraisals. Real Estate IS NOT a commodity, so values are always quite subjective. An Appraisal or Valuation might be couched in very Objective or or Mathematical Terminology; but at best it's a Pseudo-Science.

The value you get always depends on why you wanted the appraisal or valuation . . . . i.e. what you purpose you want to use the resulting value for or what you are trying to achieve.

A simple valuation to remove PMI (Private Mortgage Insurance Premiums) from an Owner's Mortgage Payment is the most straight-forward that I can think of. There we know what number (or % of Owners Equity versus Value) we're aiming to achieve.

A Pre-Listing Valuation to con the Seller into listing with you is another fairly simple reason for my doing a valuation . . . . Real Estate people are prone (typically) to error on the high side in order to "Buy the Listing". I know I have done this in the past; but I have to be careful these days, because then that Owner may actually think I can sell the place for that stated value (fat chance!).

When we have a Divorce Situation and one member of the Couple will be staying in the House and buying out the other, the one who stays wants the value to be as low as possible; while the one being bought out wants the value to be as high as possible. Seldom can I help them reach a value that's acceptable to both. Can't very well please both of them. It's often best for the Divorce Court to choose an Appraiser who "might" give an impartial value.

Similarly, I'm helping a New Jersey Family right now to put a value on their Vermont Lakefront Cottage . . . . Four (4) Siblings have inherited the well loved compound, and three want to liquidate while the 4th wants to own it, and expects her Brothers and Sisters to sell their 1/4s to her for Cheap . . . . while they want Top Dollar! I'd like to list it; but only after they rule out this Intra-Family Transfer. I can never make any Friends in these matters.

When we have a Pending Sale, the Appraiser is always given a copy of the subject's Purchase and Sales Agreement . . . . so he/she knows the Magic Number that is the Target. In an arms-length transaction, the Marketplace will have guided the Appraiser toward the answer. What a surprise !

Appraisers are very good at achieving a value that magically matches (or slightly exceeds) the number on the P&S ! But they're not so good when left to their own devices without a road map and told "Here you go; start with a blank slate and tell us what it's worth!"

You're asking for something in that last category. Right now, you just want a clear and objective statement of the Condo's Current Value, not influenced by any of the aforementioned conditions, so you might just get the blank stare! If the Appraiser is just trying to please you, and give you a nice price, it may be quite different from what you will achieve in the Real Marketplace later on. But Good luck anyway !

You might want to explore your options with a short sale. That's a way to sell your property without having to come up with the difference between what you owe and what the property is worth out of pocket. If you are currently making your payments on time, this option might not be available to you (and it would wreck your credit for quite a long time to come, when it comes to buying another property). But it's another option to consider. In a short sale, the lender pays the real estate commission, the prorated taxes, etc. If you search this forum you will find many discussions about short sales...the pluses, and the minuses.

Thanks to you both (and Vermont- very interesting stories, I appreciate your candor)

As far as a short sale, for one thing I don't think that's even an option as there is no financial hardship involved here- but for another we plan to move into a larger house to fit our growing family. That would be extremely difficult if not impossible after a short sale, and I've worked hard to get my credit up over 750 too, so I don't want all that effort to go to waste :)

I would suggest talking with several good agents in your market. Can you keep the property and rent for close to your mortgage? Can you qualify for a new loan without selling the property? A good agent will help you explore all your options so you can make an educated decision. Need help finding a good agent in your area? Many memebers here can help, I can put you in touch with someone in your market area.
Good Luck!

You and your family's future could benefit with financial advice and strategic planning.

Explore a HAFA short sale and see if you qualify.

A growing family is a financial hardship.

Your credit may suffer a 50-80pt hit on a short sale but it will probably recover faster than you'll recover the tens of thousands that you may spend paying the difference btw sale and loan amount.

Find an agent in your area who does BPOs. They generally run for 50-65 bucks. Look for an agent who handles foreclosures.

Well, it's always something to consider as a last resort, but since I am able, I would personally rather accept the responsibility of my financial decisions and keep my credit intact. A growing family definitely affects your financial position, but whether or not it's a financial 'hardship' depends on your financial situation. For us there is no hardship involved in the sense that we aren't even close to having a problem making our monthly payment. Also, if I have poor credit for the next 3-7 years, I'm also losing money in higher interest rates and locking myself out of home buying options that we might have otherwise had so I'm not sure it's that cut and dry. So while I do appreciate the help/suggestions I think for now I'd like to focus on my other options.

@ReoDayton-
Thanks I will look into that. Why do you recommend an agent who handles forclosures, are they more likely to give an accurate estimate?

This is being way overcomplicated.

A seasoned broker/agent can give you a ballpark in a matter of minutes looking on the MLS.

The current SOLDS will tell what buyers are willing to pay for a similar product,square feet,location.Based on what has sold (the seller actually closed) I would get a range.

So if the sold range low end is 90,000 and the high end 100,000 you work numbers like this.

Say you owe 110,000.

Sales Price 95,000
Commissions 6% = 5,700
Concessions to buyer 3%= 2,850

Net to seller = 86,450 - 110,000 mortgage = 23,550

Then ask yourself is 23,550 in cash needed to close something I am willing to do? Yes or NO

If not you can stay there or rent it out.Those are your options.If you can afford to purchase another house debt wise with your current mortgage then purchase the bigger house and rent out your current one preserving credit.

When values rise and get close enough you can sell and finally be rid of the property.

Some buy another property and let the other one go afterwords (strategic default) but this will hurt your credit.

In most markets values are declining.So if you can't stomach the amount of cash needed to close today it will just increase in the future in most markets.

Then you are left with renting it out.Get a property management company to give you going rental rates in the area to see what difference will be in mortgage payment.Say mortgage is 1,200 and rent is 800 then you would have to bring 400 a month to cover mortgage.If your interest rate is set to adjust you need to factor that as well.

If you don't qualify for a mortgage for a bigger home while keeping your current mortgage then if you are bulging at the seems you could rent a bigger home while renting yours out.

You could do a straight rental or lease purchase/lease option.You would have to worry about the landlord not paying their mortgage company and the property foreclosing.If the house forecloses you are renting then the bank has to honor the term of the lease.If your say 1 year term ended and you were month to month they have to give you 90 days notice to vacate.

So I hope these options help you some.An appraisal you don't need to spend the money on.Appraisers often fluff numbers when not doing them for loan evaluations from lenders or banks.The reason is if they don't come close to the numbers a seller wants often times the sellers try to stiff them on payment.

This is why just plain old solds tell the story.

Have you checked to see if your lender is under the HAFA short sale program? If so, you won't need to make up the difference.

Another alternative would be to request a "short pay" where you negotiate your loan amount down to match the current market value.

Or you you may qualify for state funds used to reduce your principal by up to $50,000.

Or you could secure a loan with a new lender for your home and Freddie will sign over the home and let you run with your new lender/new loan.

Or you could waste your money on an appraisal and throw your kids' college education money at Wall Street and pat yourself on the back for having good credit.

Some short sellers report NO hit to their credit rating, some report 20-80pts off and it lasts for 2 years, not 7.

honestly, I appreciate the advice, but I'm not sure why you're pushing short selling so hard here...it really doesn't fit my situation. When looking into a refi and other options, I did look at loan modification programs, and I don't qualify for any. My monthly mortgage payment is not over 31% of my monthly income, and I'm not considering other "forclosure alternative" options (since i'm not in any danger of forclosure), which also seem to be qualifications for HAFA, so even if it was an option I was considering, I don't think I would qualify.
When I posted this I was asking about my options for getting a good assessment on the market value of my house- preferably through an agent. Outside of that, as far as my options on what to do with my home, I have done my homework and understand the different options open to me and the math behind them.

I have a home that is upside down on it's value- it's unfortunate but that was part of the understood risk of investing in a home. While it sucks, I'm lucky enough to still be in a good financial position, so if you call taking responsibility for my financial decisions, and keeping good financial options open by maintaining good credit (which SAVES me money for my kid's college education in the long run) "patting myself on the back", then that's fine by me. I'm not looking for handouts backed by taxpayer money just because I'm unhappy with my investment. If I was actually struggling and/or in financial hardship, then maybe that would be a different story.

Good! That's what I wanted to make sure. Cuz you sounded like you had decided you wanted to buy an appraisal and maybe sell, but really hoping the market would turn around soon (it's not.)



If you need to accommodate your growing family, then not being able to afford to the difference and therefore being FORCED to be squeezed into your little home is a hardship.

The foreclosure agent does BPOs everyday. Its a report that gives a value, like an appraisel. They look at whats sold, whats for sell, and gives a price. They are not going to inflate the price to try and secure a listing. They are not going to pressure you to get the listing. You will have paid for their service and thats it. If you choose to use that Realtor in the future, thats fine, but you won't be hounded to do so.

whether or not the agent will do an analysis for you or not is up to them. Any Realtor that does an analysis for you will do it in hopes of earning your listing in the future.

While it's true:"Realtors have a stronger sense of the 'people' side of the equation...i.e. what people in today's market are paying and would be willing to pay for your property."
....a low appraisal can certainly kill a deal. You might be OK since you're willing to bring money to the table.. but even then, the Banks are getting weird about ANY hiccupsin the Loan process.

Either get a Realtor to do a SOLD comp analysis, or get the Appraisal so you know where you stand.

For a cheaper appraisal, you can try automated valuation model (AVM). Before the real estate market decline, AVM has been widely accepted instead of a appraiser going out to the properties. It costs $20-$30 and the result is typically close to an actual appraisal. When I was in the mortgage business, I used AVM for clients that were uncertain the worth of their homes and didn't want to spend hundreds of dollars on appraisals.

It's okay to appraise your house or any other property even you have no intentions to sell it. This is to provide you a report that how mush do your property increase or decrease in value.