Quote Originally Posted by DenariusJay View Post
...snip... If someone "undercut" in the housing market, it would be ignored by an appraiser because its a motivated sale that doesn't reflect what a fair market value is - they are suppose to do this to keep the integrity of the housing market...snip...
That's not exactly true. If it's the only comparable available within the distance parameters given by the lender it will indeed be used in the appraisal and considered in the determining the value of the home in question. Appraisers are required to use comparable houses and homes that are within a reasonable vicinity to the home being appraised. The sale price of the home is indifferent to the goal of the prospective home buyer or home owner refinancing their home.

What you are talking about are homes that have either sold at auction or homes appraised with what is referred to a "subject to" values. The reason it is this way is because there is no real way, other than what homes in the vicinity have sold for, to determine what a home is worth. If homes in a certain area are selling for less than what someone believes is really what their home is worth, that's just tough I've ran into that before. It's a jagged pill to swallow at times, but it is the way it is regardless.

But ya, I've undercut my own retainers before in an attempt to encourage impulse buying. I never undercut by very much though. I try to preserve the integrity of the market as much as I can, aaaand I'm a little greedy I suppose