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I cant understand the reason why an appraiser would lowball it. As a buyer, I have recieved the appraisel and seen the other comps on it
Why are you saying the appraiser lowballed it? Are you suggesting that the average homebuyer or yourself is much more in tune with the market value of real estate than a professional appraiser?
If lenders trusted buyers to know the value every time they bought a house, there would be no appraisals. No need for this "cottage industry", right? Contract price sets the market. Oh geez......
The particular house did not have any comps that were totally the same as the house we were buying. Either the land was smaller or the house was smaller. Therefore it was necessary to hire an appraiser ; isnt that what they do ; value the home with comps.
It's rare that the comparable properties are mostly identical to the subject property, so the properties used in the appraiser are considered comparables irrespective of how similar they are. That's why adjustments are made. So whatever properties are in your appraisal are indeed 'comparables'.
The lender hires an appraiser to protect their interest. But the agent is representing the buyer and should have provided preliminary data to the buyer before placing an offer. If the appraisal shows that they are going to overpay by a massive amount then that's evidence that the buyer's agent isn't doing their job.
I think you are misunderstanding me. I am all for having property appraised. I also have no problem at all with appraisers at all. I agree that the agent is representing the buyer, but in my case, no homes were sold within almost a year which could be used as a comp.
My point is that I am hoping that the seller will come down to the appraised amount. We are selling and buying at the moment. In no way am I saying that i know more than the appraiser ; gosh, no way. Its not my job. That is why I hired an appraiser.
As a seller, our home was also appraised at $24,000 less than the agreed price, so to keep the buyer, we lowered the price. Now put me on the other side as a buyer, I am hoping our seller does the same as we did.
I've started hearing more about appraisers coming in very low, even when comps are in line. So I know it isn't just me and my agent either. Either there's downward market trending going on (still entirely possible) or for whatever reason they're just lowballing.
What I want to know is, what is stopping appraisers from just lowballing it? Are there ethics laws or regulations that they have to abide by?
Yes there are. Which is why, when your appraisal comes in lower than you would like, it is influenced by the market, not by an appraiser "lowballing" it.
Yes there are. Which is why, when your appraisal comes in lower than you would like, it is influenced by the market, not by an appraiser "lowballing" it.
Seriously. Why would an appraiser do that?
Present company excluded, of course, but there is a certain amount of power given to the appraiser and they know it.
If the contract price is $119k, and the appraisal comes back at $118k, are we to believe that is really the value?
What about appraisals that come in at $xxx,200. Ever seen one? The appraiser would have you believe that their accuracy is to the hundred dollar mark. Really?
Not everyone is ethical or a saint, no matter what their trade is. some are good at their jobs, and others welcome every opportunity to show the world how powerful and smart they are.
Present company excluded, of course, but there is a certain amount of power given to the appraiser and they know it.
If the contract price is $119k, and the appraisal comes back at $118k, are we to believe that is really the value?
What about appraisals that come in at $xxx,200. Ever seen one? The appraiser would have you believe that their accuracy is to the hundred dollar mark. Really?
Not everyone is ethical or a saint, no matter what their trade is. some are good at their jobs, and others welcome every opportunity to show the world how powerful and smart they are.
Again though, why come in low? What "power" does that give the appraiser? It doesn't benefit them in any way.
And lastly, it appears you have a problem no matter what the appraiser says. If it is too low it must be a "power" trip. If it is too close to the contract price you also have an issue with it. Tough crowd.
And the second part of your post is a little silly. No matter what value they come up with it will be to the dollar level. 120,000 and 120,090 are both to the single dollar level.
The lender uses the appraisal to make their decision about the terms of the loan, including whether or not to lend the money. An appraisal can come in below the sales price and the lender can still decide to approve the loan, irrespective of the appraisal. So the lender has the final say.
There are bad appraisers out there- no doubt about it. And I'm certainly not supporting them. But think about it for a moment. Even a bad appraiser who wants to ignore the many laws that we are under would be stupid to intentionally under-appraiser a property. That appraiser is more likely to lose clients as compared to coming in too high. So an unethical appraiser would best be served by coming in at the sales price or higher.
What is your support as to why an appraiser would intentionally want to come in low?
I've been appraising for over 25 years and have never once heard an appraiser brag about intentionally coming in high or low. Incompetent appraisers will inadvertantly do that, but no one wants to have any 'power'. What benefit does an appraiser accure by doing that? That's ridiculous and doesn't match up with actual experience.
Again though, why come in low? What "power" does that give the appraiser? It doesn't benefit them in any way.
And lastly, it appears you have a problem no matter what the appraiser says. If it is too low it must be a "power" trip. If it is too close to the contract price you also have an issue with it. Tough crowd.
And the second part of your post is a little silly. No matter what value they come up with it will be to the dollar level. 120,000 and 120,090 are both to the single dollar level.
It is a power trip when the dollar figures are statistically insignificant.
You obviously don't understand the appraisal business. It would be really stupid for an appraiser to inentionally come in a few hundred dollars under sales price in order to be on some sort of power trip. That appraiser is likely to lose a lot of business doing that. Again, the key word here is 'intentional' meaning that the appraiser is coming in with a biased appraisal.
There are some appraisers who believe that they should appraise a property without having any concern for what the sales price is. And I agree with that. You don't want the sales price to influence the appraised value.
Now, here's why I am different than an appraiser who would come in with an appraised value only a few hundred dollars lower than the sales price. I believe most properties have a range of values. This is also supported by USPAP. However, Fannie Mae requires than an appraiser derive a single point of value. So when I see that my appraised value is within a few hundred dollars of that POINT, then I realize that it probably falls within my RANGE of value and I have no problem making the two match.
However, it is interesting to note that the argument goes both ways. If an appraisal shows that the appraised value is the same as the sales price then one could argue that appraisals can't be that accurate, so perhaps it actually underappraised.
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