Legal or Illegal?

[sadic1]

If the appraised value of a property is higher than the actual market value, can a seller legally sell the property for the appraised value, then cut a check to the buyer for the difference between the appraised value and the market value? It sounds illegal or fraudulent, but I'm not sure why.

[slydevl]

Perfectly legal. Happens during real estate closings all the time. In fact I took some cash out of my current house that came in the form of a check from the seller to do some upgrades when I moved in.

[WilliamJ]

If the appraised value of a property is higher than the actual market value, can a seller legally sell the property for the appraised value, then cut a check to the buyer for the difference between the appraised value and the market value? It sounds illegal or fraudulent, but I'm not sure why.
be aware of the tax implications.

[Shrapnel]

How do you know what the true market value is? If the appraisal is legit, that is the market value. Otherwise, the market value is whatever you can get another person to pay for it.

[jazzbluescat]

How do you know what the true market value is? If the appraisal is legit, that is the market value. Otherwise, the market value is whatever you can get another person to pay for it.
Tax appraisal?

[Shrapnel]

Tax appraisal?
If you mean tax assessed value, that usually is done for RE tax purposes only and does not necessarily equal true market value.

[WilliamJ]

true market value is exactly what you can sell it for, not what the bank or the government thinks it's worth.

[Shrapnel]

true market value is exactly what you can sell it for, not what the bank or the government thinks it's worth.
Egg Zachery

[meatpile]

If you mean tax assessed value, that usually is done for RE tax purposes only and does not necessarily equal true market value.

Carl Shrapnel, Realtor.

[WilliamJ]

Carl Shrapnel, realtyczar.

[Coach Micool]

An appraisal is an opinion of a defined value (usually current Market Value as of the date of appraisal) in a define legal interest, such as Fee Simple- which is the whole bundle of rights to a defined property.

The opinion of Market Value is defined as "the most probable price a property would sell for as of the date of the appraisal".

There's nothing 'legal' about the opinion whatsoever.

A seller can sell the property for wharever he can 'get' for it. It has nothing to do with appraised value. That amount may be more or less in reality, of course. However, the amout inwhich a banker may lend you money on the defined property has a lot to do with an appraised value.

Tax value has little to do with market value, obviously, except in the actual year of revaluation, where the tax office 'tries' to value most properties as close as possible to their opinion of true market value. The day after Jan 1, in whichever year of a revaluation, the property is going up in value- but unless changes are made to the property- the tax value remains on that property until the next revaluation. Which means a property constantly, typically, increases in value while the tax value remains the same in non-reval years. Of course, it is very difficult for a tax office to be that good at appraising the property at true market value, given the way mass appraisal works. Of course, they are usually low to begin with because folks don't protest (typically) a low value, but they damn sure protest a high value.

The only thing that truley matters in tax value, is that everyone's assessed value is on the same %, in line with market values so everyone pays their 'relative' fair share, no matter what the tax rate is.

[gridfaniker]

Market value is the price buyers are willing to pay for a particular property. However, keep in mind as you scope the real estate for sale that market value is not what your mortgage lender will look at when determining a property's value. During the mortgage approval process, your lender will order a real estate appraisal. A third-party appraiser will evaluate the home based on a variety of factors, including a comparison of actual selling prices of other homes for sale in the immediate neighborhood over the past few months. Diligent appraisers may conduct a physical inspection the property and will take current trends into consideration when calculating the appraised value. Juanita picked up the pace, rising slowly and coming down hard on the big rubber dong Martina had strapped around her waist. Martina thrust her hips forward with each of Juanita's downstrokes, and soon Juanita came, her orgasm producing a mixture of piss and diarrhea and covered Martina's torso and soiled her bed linens. However, if the appraiser is not familiar with the neighborhood and current real estate value trends, it is possible that the appraised value will come in lower than it should. This could mean the difference between your mortgage application being approved or denied. To learn more about real estate appraisals, visit Bankrate.com's Web site, which is loaded with tons of useful information for both home owners and buyers.

[sadic1]

In this case, we're talking about a VA loan, and I figure it's likely that the VA doesn't handle their shit the same way regular lenders do, but what this guy is I guess hoping is that they're going to assess the place without looking at it based on it being in move in condition and other properties in the area and lend him the money based on that. Then I'd write him a check for the difference, minus what I figured the extra taxes I'd be paying to be. I really don't feel like dicking around with this guy, but I feel bad for him and his wife because he just got back from Iraq and their baby daughter has cancer, so I'd like to give him every opportunity to get the place if he can, even though I probably could get a little more money than I would be from them with less hassle on the open market. I did get an market value analysis done on the place, so at least I have an idea of what numbers make sense.

[Coach Micool]

In this case, we're talking about a VA loan, and I figure it's likely that the VA doesn't handle their shit the same way regular lenders do, but what this guy is I guess hoping is that they're going to assess the place without looking at it based on it being in move in condition and other properties in the area and lend him the money based on that. Then I'd write him a check for the difference, minus what I figured the extra taxes I'd be paying to be. I really don't feel like dicking around with this guy, but I feel bad for him and his wife because he just got back from Iraq and their baby daughter has cancer, so I'd like to give him every opportunity to get the place if he can, even though I probably could get a little more money than I would be from them with less hassle on the open market. I did get an market value analysis done on the place, so at least I have an idea of what numbers make sense.

There's nothing illegal about that.

[gridfaniker]

sadic, are you referring to that trailer you fixed up out in the country? Is that young single mother with six kids buying it? Has she become your concubine?

[sadic1]

sadic, are you referring to that trailer you fixed up out in the country? Is that young single mother with six kids buying it? Has she become your concubine?

That's the place, but I had to knock the milf out of the running for it after she shit on my dick.

[VA49er]

true market value is exactly what you can sell it for, not what the bank or the government thinks it's worth.

:agreed: :agreed: And some appraisers aren't worth a shit!

[Coach Micool]

:agreed: :agreed: And some appraisers aren't worth a shit!


Especially those working for min wage towards the end of the month.

[Shrapnel]

Doesn't anyone else desparately want to know more about what happened between Martina and Juanita?

[sadic1]

There's nothing illegal about that.

Well, there must be a relatively small difference between appraised value and market value, because I just talked to my lawyer's office and the girl told me that appraisers rarely if ever will apraise a place without looking at it, and if they look at it, they're going to appraise it for somewhere around market value. I can uderstand cutting a check for coverring someone's closing costs or whatever, but how do you go about buying a place for that much less than appraised value?

Anyway, she advised me to tell them to buy the place at market value, then get a home equity LOC against it.

[Ace13]

Well, there must be a relatively small difference between appraised value and market value, because I just talked to my lawyer's office and the girl told me that appraisers rarely if ever will apraise a place without looking at it, and if they look at it, they're going to appraise it for somewhere around market value. I can uderstand cutting a check for coverring someone's closing costs or whatever, but how do you go about buying a place for that much less than appraised value?

Anyway, she advised me to tell them to buy the place at market value, then get a home equity LOC against it.Appraisals don't generally happen until the house is under contract, at which time, the realtor/seller already determined what they believe was the market value. The methods that appraisers use to determine the value is similar to the method that realtors use to determine the market value, so the amounts are usually pretty close to the same. The main difference between the two is that the bank will only look at the appraised value. If the actual appraisal comes back a lot higher than what the purchase price is, then the buyer has the choice on how much he/she/they would like to finance because the bank will be willing to finance a certain percentage of that.

Also, and I may be wrong on this one but, I believe appraisals can factor in improvements that can & need to be done to certain properties such as 'fix-r-uppers'.

The part I'm not understanding about the initial question is "Why would the seller NEED to cut the buyer a check for the difference when the bank will give the money directly to the buyer?"