WASHINGTON -- All sorts of things can sink a housing deal in this fragile market -- one of them is a low appraisal.
According to the National Association of Realtors, a third of real estate agents reported low appraisals delaying or ruining housing contracts this summer.
That's up significantly from the summer before.
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4 comments:
Wow...what an eye opener! The appraiser bases the value on home sales in the neighborhood so you should price your home realistically. This is news??
I'm an appraiser. We use the most recently settled sales that are the most similar to the subject property. If you are in a neighborhood full of foreclosures then that is what is guiding the market. If your neighborhood has only had one foreclosure, that's not typical of the market so that sale is not a true indicator of market value.
Appraisers live in homes too....why would we want to depress the market just for the fun of it? It would affect our home value too!
I'm always open to comparables and data supplied by the owner or the Realtor. As long as it is current and truely comparable - not like the one recently who wanted me to go to Salisbury when there wasn't a sale that would "prove his home's worth " (his words not mine) in all of Ocean Pines. REALLY!!!!?????
interesting...our appraiser wouldn't use a house 7 doors down, because she said it was not "usual" of todays market..Instead she used houses that were 3x the age of mine and 12 miles away...
I think it is a tricky field...you want to be fair...but to who, the bank or the seller??
1:57...does this openness also apply to re-fi's, or is completely different?
The appraiser is doing their job. They answer to the bank. The loan must be collateralized at the correct amount so that a bank can weigh the risk of the loan based upon an LTV (Loan to value ratio). In 2007 HVCC mad it basically illegal for the appraiser to be contacted by the loan officer. Hell, it should have made it illegal for the realtor to talk to them as well. Appraisers have no business listening to realtors. Realtors are motivated to sell a property at the highest price possible to maximize their commission. It was a small part of the problem that got us where we are today.
My favorite movement was the NAR trying to get appraisers to stop using "distressed" properties as comps because it would low the appraisal, hence lower commissions. Newsflash! If you live in a community of say 50 houses and the most recent 5 sales are foreclosures, than those are the comps! A realtor knows as much about value as my dog knows about neurosurgery.
I'm not an appraiser but have worked in financial services for a long time. People need to stop making the appraiser the bad guy. Don't shoot the messenger so to speak. Let them do their job and let the housing correction continue. If people want to bitch about values, bitch to congress and the president to stop intervening in the market place and let the supply handle itself. This would have probably been over two years ago had it not been for HARP, HAMP, and all the other crap they have tried.
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