What is the name of your state? CA
A friend bought a new home about 7 months ago for 800k. Four months after the purchase, the builder slashed the price by 150k because they couldn't sell the other homes. They had only sold 12 of 40 homes in the tract. After dropping the price, ALL of the homes were sold in just a matter of weeks. The Builder know they had PRICED the homes WAY BELOW MARKET. In looking at the appraisal report, the first 2 homes sold showed that the appraisal is very bad. Appraisal takes comps from 3 miles out & 1 comp shown was built in 1958! Appraiser & lender both used are from the builder. Most of homeowners bought with 10%down & 1 homeowner bought with 100%financing. The new selling price is in the high 600k. ALL of the original 12 homeowners now OWE more than their home is WORTH! They are completely upside down. With the bad appraisals to begin with, would this indicate some kind fraud? The problem is that the appraisers did not get good comps but somehow they got the loan & the appraisal report to pass? Wouldn't this indicate the appraisal is overpriced to begin with? Is there any recourse the homeowners can pursue to recover their losses? Could they sue the buider and appraiser for misrepresenting the value of these homes to recoup their financial losses?
Thank you in advance for any advice or suggestions.
A friend bought a new home about 7 months ago for 800k. Four months after the purchase, the builder slashed the price by 150k because they couldn't sell the other homes. They had only sold 12 of 40 homes in the tract. After dropping the price, ALL of the homes were sold in just a matter of weeks. The Builder know they had PRICED the homes WAY BELOW MARKET. In looking at the appraisal report, the first 2 homes sold showed that the appraisal is very bad. Appraisal takes comps from 3 miles out & 1 comp shown was built in 1958! Appraiser & lender both used are from the builder. Most of homeowners bought with 10%down & 1 homeowner bought with 100%financing. The new selling price is in the high 600k. ALL of the original 12 homeowners now OWE more than their home is WORTH! They are completely upside down. With the bad appraisals to begin with, would this indicate some kind fraud? The problem is that the appraisers did not get good comps but somehow they got the loan & the appraisal report to pass? Wouldn't this indicate the appraisal is overpriced to begin with? Is there any recourse the homeowners can pursue to recover their losses? Could they sue the buider and appraiser for misrepresenting the value of these homes to recoup their financial losses?
Thank you in advance for any advice or suggestions.