Your Real Estate Insider

What are houses really worth?

I am working for some buyers, and we currently have a home under contract. The home is a bank owned foreclosure. The buyers are getting a great deal. I am a real estate agent but i am also a general contractor that builds and sells new homes. The purchase price of the home is well below the amount it would cost a contractor to build it. That is understandable, it is a foreclosure and the banks want to get it off of their books. The appraisal came in at exactly the purchase price. I had assumed it was going to come in way higher, atleast what it would cost to build. This scares me. If homes are appraising for less than they cost to build, we have a bigger problem than i thought. Part of me thinks that it appraised for that exact amount because the appraiser kept it as low as possible without hurting the deal. Does anyone have an opinion about this or a similar story? If so let me know. Thanks Aaron Poling

7 comments • Aaron Poling • April 02 2009 10:07PM