home appraisals 2011 (for sale, mortgage, loan)

[making sense]

appraisers in today's market are acting more conservative? how are homes appraising nowadays?

[Plano Guru]

According to my limited knowledge, most homes are appraising for near or below contract price.

[homebuff]

If federal regulators were truly concerned about the quality and independence of home appraisals and sound mortgage lending - they would simply prohibit appraisers from learning the contract price before they perform their assessment of a home's value? Why not a give them a clean slate? For a purchase, the appraiser is hired after the meeting of the minds takes place. This assumes that the buyer is educated in the market in which he is purchasing. How does he get his education? Is the realtor his only source of information? Realtors are motivated by greed for commission. But, what about VALUE? If the appraisal was mandatory to be done PRIOR to listing the house for sale and the seller and realtor had NOTHING to do with pricing it, just maybe, the problems could be averted.

[Jan70]

Originally Posted by homebuff

If federal regulators were truly concerned about the quality and independence of home appraisals and sound mortgage lending - they would simply prohibit appraisers from learning the contract price before they perform their assessment of a home's value? Why not a give them a clean slate? For a purchase, the appraiser is hired after the meeting of the minds takes place. This assumes that the buyer is educated in the market in which he is purchasing. How does he get his education? Is the realtor his only source of information? Realtors are motivated by greed for commission. But, what about VALUE? If the appraisal was mandatory to be done PRIOR to listing the house for sale and the seller and realtor had NOTHING to do with pricing it, just maybe, the problems could be averted.

I agree

[TurtleCreek80]

Originally Posted by homebuff

If federal regulators were truly concerned about the quality and independence of home appraisals and sound mortgage lending - they would simply prohibit appraisers from learning the contract price before they perform their assessment of a home's value? Why not a give them a clean slate? For a purchase, the appraiser is hired after the meeting of the minds takes place. This assumes that the buyer is educated in the market in which he is purchasing. How does he get his education? Is the realtor his only source of information? Realtors are motivated by greed for commission. But, what about VALUE? If the appraisal was mandatory to be done PRIOR to listing the house for sale and the seller and realtor had NOTHING to do with pricing it, just maybe, the problems could be averted.

So your solution is to let appraisers price all homes for sale? Guess what- appraisers appraise based on the CURRENT MARKET VALUE, which is what buyers are willing to pay and sellers are willing to sell for. If appraisers set home values and prices, that's no longer free market capitalism, the cornerstone of America's economy.

Another nut in favor of socialism.....I will never understand. Everyone wants capitalism while values are rising. Funny how so many people turn face as values are stagnant/ declining!

Giving total price-setting power to appraisers is one of the craziest ideas I have ever read on City-Data....and there are some crazy people on here. Let me guess- you probably want these appraisers to work for the government and let the government set our home prices, too, right?!

[imcurious]

Wow. Some people do not understand how a free market works. Let me recap: A house is worth what a buyer is willing to pay for it at a particular point in time. Lenders have a vested interest in making sure a home appraises for the amount of the loan, but if the buyer wants to pay more for the house - then they should be able to bring in extra cash if they have it - and in the case of all cash sales, anything goes - an appraiser is only making an estimate of the market - taking a snapshot - at a particular point in time. Appraisers don't always use the best comps - and they don't always add or subtract value based on features or lack thereof . . .

The reason it does not make sense for a seller to get an appraisal when they list (before there is an offer) is because the market is fluid.

[Rakin]

Originally Posted by imcurious

The reason it does not make sense for a seller to get an appraisal when they list (before there is an offer) is because the market is fluid.

And 5 appraisers can have 5 different prices depending on how good they are and the comps they use. What happens if the house stays on the market 6 or 12 months and the market goes up or down ?

[imcurious]

I give up, what happens?

I agree with you that five appraisers can render five different prices depending upon the comps they use and how good they are in doing the appraisal . . .

I think Realtor's have the best ability to predict price at any particular point in time because they have access to not only the comps, but the right comps, as well as the current market conditions. Appraisers have no real feel for market, neighborhoods, etc.

[making sense]

oh please do not forget that my question was about homes appraising trend nowadays?

p.s. i agree that appraisers do not need to know the contract price and realtors have too much power in this business.

[Rakin]

Originally Posted by making sense

oh please do not forget that my question was about homes appraising trend nowadays?

The general public won't know "Trends" in appraisals. You should ask this in the RE sections where more professional opinions will be available to comment.