Question

Stockton broker Dustin Giles has been asked by super-cautious sellers Frank and Carole Bellacera to find out the comparable sales for their property, since they aren't sure at what price they should list their property. When Dustin gives the information to them, they insist this is NOT what they want. They want to know what the actual value is that a lender will use to establish a loan amount. Someone is confused here, but which someone

Answer 1

The confusion lies between the ideas of comparable sales and appraised value. While the Bells are looking for the appraised value for loan purposes, Dustin provides market value via comparable sales. An appraisal is the lender's tool to determine a home's value for a mortgage loan.

Step-by-step explanation:

The confusion here seems to arise from a misunderstanding between comparable sales and appraised value. Dustin Giles, the stockbroker, is providing the Bells with information on similar properties that have sold, which gives an idea of the market value of their home. However, Frank and Carole Bellacera are interested in the value a lender would use to establish a loan amount, which is typically determined by a professional appraisal.

In real estate transactions, an appraisal is an estimation of a home's market value by a licensed appraiser based on comparable sales, the condition of the home, and the current market trends. This value is used by lenders to determine how much they are willing to loan. For example:

Freda's house was purchased for $150,000 and could now sell for $250,000, showing an increase in market value.

Ben bought a house for $100,000 with a 20% down payment and now, after market appreciation and some mortgage payments, the house is worth $160,000, and he owes less to the bank.

Similarly, Frank's house with a value of $160,000 and a remaining mortgage of $60,000, gives him an equity of $100,000.

Each case illustrates how market values can change over time and affect equity. However, the appraised value is different from the market value or selling price; it's an independent valuation that considers various factors a lender requires before approving a loan.

Answer 2

Frank and Carol Bellacera are confused

Step-by-step explanation:

The fact that the couples are super -cautious in nature is getting them confused concerning what they actually wanted as they were trying to be extra careful.

They initially requested for a comparable sales price for their property towards listing, known as comparative market analysis which Dustin Giles provided. However , they went on to change their request to the actual value that a lender can be used to establish a loan which is appraisal .Dustin could have been able to do the appraisal if only he is an independent licensed appraiser practitioner.

Therefore from the scenario ,it is very obvious that Frank and Carole did not really know what they wanted or probably have not made up their mind concerning their decision on the property.