Guest Post by Eddie Godshalk at Simply Stacie
Home buyers and investors often make their home purchase and property investment decisions based solely on appraisals and MLS-based information about housing prices. They assume that those sources provide accurate and reliable information that reflects the true market value of the properties they intend to buy, and all relevant current local information. However, this assumption is very incorrect.
Appraisers have been under tremendous pressures from mortgage brokers to overstate home values. These pressures were especially evident during the past decade, given the exceptionally aggressive mortgage lending that lead to the creation of the housing bubble. As appraisers receive over 95 per cent of requests for their services from mortgage brokers, it is obvious that many succumb to the pressures and artificially inflate housing prices. Moreover, appraiser can inflate home values by ignoring problems or comparing appraised homes with inappropriate comparators. As a result, if they rely on appraisals alone, home buyers may actually pay more for a home than what a home is actually worth. And in fact, many buyers actually did.
The Home Value Predictor™, which looks at current local socio-economic, demographic, and financial forces behind the changes in home values at the block level, is thus a more reliable indicator of actual values of homes at any particular time in any specific local market. It is also more useful as a decision-making tool than the information provided from appraisers or MLS sources because it offers a perspective into future trends in housing prices.
More in my new book The Missing Keys to Thriving in Any Real Estate Market.
About the Book:
Title: The Missing Keys to Thriving in Any Real Estate Market
Author: Eddie Godshalk
Eddie Godshalk, author of “The Missing Keys to Thriving in Any Real Estate Market” reveals the information that was missing, that caused the housing and financial crisis. There are over 350,000 markets in the US. Have you ever wondered where to find current local information?
The current housing crisis is caused by a lack of quality relevant local information and a lack of due diligence on loans and loan packages (MBS). Can the sub-prime housing market crash occur again in your town? Noted Real Estate author, analyst and lecturer Eddie Godshalk, fore-warns that the answer is yes, because the loan approval process is currently encapsulated with only a few profiles of three to six month old data. There is no consolidation of local meaningful data to mitigate risk. “To conduct meaningful real estate due diligence, you need to know how one block compares to another block and the surrounding blocks and use updated current information,” states Eddie Godshalk, Author of The Missing Keys to Thriving in Any Real Estate Market and CEO of Silicon Valley, basedValue Predictor, LLC.
For more info, please visit Eddie Godshalk's website.
