Submitted by 0716718227 t3_zbjpbw in philadelphia
Comments
Civil_Peak t1_iyti3c5 wrote
> Why is this glossed over?
because it easier to blame the mortgage lender for racism then admit they are not pricing their house right. I've been looking at houses for the last 2 years (right before the pandemic) and I've encountered so many who think their house is the best and they are not overpricing it and don't realize the houses has issues or the neighborhood has issues etc. But, in this market problems like that get masked to a point.
What I've learned is that is the buyers really want the house they can tell the mortgage company to reappraise (sounds like only the sellers asked which the mortgage company not going to care), or the buyer can say they will pony up the rest of the cash. If the house was even half decent then the sellers would have said good riddance as there would have been another buyer that was trying to put an offer.
Additionally, I've been told an appraiser has a vested interest in appraising the house for what the buyer wants it for. The mortgage company wants get buyer as a customer and get the house bought. If the mortgage company can't get customers then they are not going to be hiring the appraiser. So the appraiser wants to get rehired by the mortgage company.
Trident can be a company that has issues but in this market the sellers are missing the point that there house is way over priced.
[deleted] t1_iz80mho wrote
[removed]
HoagiesDad t1_iysmwht wrote
Your house is only worth what similar homes in the neighborhood sell for. If you put in a bunch of upgrades it will attract buyers but the banks look at numbers. My home in Frankford is really nice. I might get $180k but chances are it will asses for less because the surrounding homes sell in the $160k range. Mine being nicer is irreverent. Now if someone comes in with a cash offer or big down payment. I will probably get asking. That will change the appraisals in the area slightly upwards. Demand and ability to pay mortgages increase appraisals. Period
Indiana_Jawnz t1_iyt9v91 wrote
Exactly; Location, location, location.
My home would easily be worth double it's value if it was located in, say Havertown, and probably near triple if it were in Lower Merion.
But it's location is what it is, so it isn't.
I tried to buy a home in Lansdowne a few years ago but the bank appraised it lower than what I needed for a mortgage for, so that was that.
[deleted] t1_iz81lyj wrote
[removed]
HoagiesDad t1_iytdr6m wrote
Something tells me that people who think this is racist wouldn’t live in an all black neighborhood. I know the demographics of Reddit. Primarily white, urban males who live in white neighborhoods and love to preach social injustice. They scream about not being able to afford a home but that’s because they won’t consider minority neighborhoods. Philadelphia still has some of the most affordable housing in the US. Set your search parameters to $100k and you will find livable homes. Don’t let your racism be your guide. Be a part of making these neighborhoods better and help increase those appraisals.
PurpleWhiteOut t1_iys86io wrote
So which is better and which is worse? On the flipside people are worried about rising home prices and the higher taxes and gentrification that comes with that. If we fixed the biases, which imo we should, won't this also lead to a higher tax burden?
NoWarButMyWar t1_iysz4av wrote
Are you arguing in FAVOR of systemic racism because it saves you property tax?
PurpleWhiteOut t1_iyt1brq wrote
Obviously not. I'm wondering if a change in this disparity would lead to further displacement. I know someone who has lived in a neighborhood her whole life that is now rapidly developing. Her property value has been shooting up and is having trouble with taxes, and it's honestly probably still undervalued.
Indiana_Jawns t1_iys8u9g wrote
High taxes are definitely better than continued institutional devaluation of minority neighbors that leads to a generational wealth divide. This is just modern day redlining.
jorge1209 t1_iysb12b wrote
Appraisers don't set the market price, buyers and sellers do during transactions.
Appraisals depend on the other transactions in the area that closed. If the offer is way above that average the appraisal will come in low.
There is a reinforcement effect from low sales prices on comps to low appraisals to lower approved loan amounts back to lower sales prices. The way out of this cycle is "cash offers". When wealthy people come in and throw cash down, prices rise and appraisals do too.
Minority communities don't have the stock market wealth that other communities do. The last decade of rock-bottom rates has increased the wealth of the already wealthy faster than those whose we wealth is tied more to their family home.
It isn't redlining although it is a really problematic economic situation.
PurpleWhiteOut t1_iys93kd wrote
Of course I 100% agree and fixing this will create a ton of wealth. I can imagine it would come as a shock to people not trying to sell.
Series_G t1_iyrzue0 wrote
I'm shocked. Shocked, I tell you.
mrhedgefund t1_iyswc7c wrote
>But their neighborhood wasn't as attractive as the Ricks might have liked. Most of their neighbors were renters, and many didn't take care of their properties. "Our house stuck out like a sore thumb, because it was maintained," Corey said. The neighborhood was considered low-income, Janine noted. Today, the typical household income in the Ricks' Darby neighborhood is about $33,000, and more than one third of residents live below the poverty line.
Why is this glossed over? It sounds like they have the nicest house on a block full of crappy ones. Was the $130k house purchased by an all cash investor or via mortgage? I don't doubt that there is some racial bias in appraisals, but I think it is easier to point out in neighborhoods where the majority of residents display pride of ownership.
In marginal neighborhoods like this, I don't think you can do "1 mile", comps where values can easily vary block by block. I think the bigger problem is buying a primary residence in a neighborhood where the majority of people can't afford or choose not to maintain their house.