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Old 03-03-2011, 05:08 PM
 
Location: Louisiana
290 posts, read 545,550 times
Reputation: 70

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What's behind home-sales-scuttling low appraisals?


What's behind home-sales-scuttling low appraisals? - USATODAY.com

"...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."

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Old 03-03-2011, 06:36 PM
 
Location: Lakewood Ranch, FL
5,653 posts, read 10,107,677 times
Reputation: 6904
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.
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Old 03-03-2011, 07:02 PM
 
Location: Louisiana
290 posts, read 545,550 times
Reputation: 70
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.


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Old 03-03-2011, 08:09 PM
 
Location: Hernando County, FL
8,488 posts, read 19,816,094 times
Reputation: 5397
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.
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Old 03-03-2011, 08:54 PM
 
Location: NJ
17,578 posts, read 44,550,988 times
Reputation: 16249
Quote:
Originally Posted by Greeenback View Post
If not, there will be an Appraiser or two within the 'batch' that is not Independent.
Or independent and sucky.
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Old 03-03-2011, 09:23 PM
 
Location: SF Bay Area
1,290 posts, read 1,976,223 times
Reputation: 816
Just curious, why the need to type in green?
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Old 03-03-2011, 09:30 PM
 
Location: Louisiana
290 posts, read 545,550 times
Reputation: 70
Quote:
Originally Posted by manderly6 View Post
Or independent and sucky.
The word "Independent" encompasses many areas as it relates, including competency. If the Appraiser sucks, then he/she is evidently not Independent.
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Old 03-03-2011, 09:31 PM
 
Location: Louisiana
290 posts, read 545,550 times
Reputation: 70
Quote:
Originally Posted by dragontales View Post
Just curious, why the need to type in green?
I like the color.
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Old 03-03-2011, 09:35 PM
 
Location: DFW - Coppell / Las Colinas
40,142 posts, read 45,835,067 times
Reputation: 52588
Quote:
Originally Posted by Greeenback View Post
I like the color.
It's hard to read. Try dark blue
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Old 03-03-2011, 11:18 PM
 
Location: SF Bay Area
1,290 posts, read 1,976,223 times
Reputation: 816
Quote:
Originally Posted by Rakin View Post
It's hard to read. Try dark blue
Yeah and it's annoying. I totally ignored that other thread due to an overwhelming amount of green comments.
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