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"...Ten percent of the nation's Realtors said they had sales canceled because appraisals came in below the prices buyers agreed to pay, according to a January survey by the National Association of Realtors. Another 15% said contracts were renegotiated after appraisals came in too low. Sellers dropped prices or buyers put up more cash."
"...A third of home builders said they had lost sales because of low appraisals, according to an August survey by the National Association of Home Builders. That was up from 26% in a 2009 survey."
"...Low appraisals were rarely an issue during the housing boom, when prices rose steadily. But the bust revealed how inflated appraisals had contributed to the housing bubble. Now appraisal and lending standards are both tighter."
Just because appraisals are detailed does not mean they are accurate or consistant or even scientific. Appraisals are supposed to be both an art and a science but that is a copout. Otherwise, appraisals of the same property by various appraisers would come in at approximately the exact same price and that is not the case. I have had a recent situation where, on a property that both the buyer and seller agreed on a price of $250,000, one appraisal came in at $264,000 and another came in at $212,000 which, in effect, blew up the deal similar to the article's reporting. Many appraisers are, in my opinion, deliberately under pricing values to cover their collective rear end after the mess that occurred a few years back. It's not supposed to happen but they are also still being influenced by agents or lenders.
I want to add something (real quick) from the viewpoint of someone who practices Real Estate Appraisal:
Real Estate Appraisal is a social science called Property Economics. There are strict standards. Calculation, such as math, is only a very small portion of the work involved.
Five different Appraisers may come up with five different values; however, there should be a small margin of error between them all. If not, there will be an Appraiser or two within the 'batch' that is not Independent.
Unfortunately, there is still cherry picking going on. Mostly by AMCs, while some influence still remain.
It just goes to show that when the market is heading up the appraisers can't get it right and when the market is heading down they still can't get it right.
Yeah and it's annoying. I totally ignored that other thread due to an overwhelming amount of green comments.
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