Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You know, I sold a house a couple of months ago that had tons of showings because my photos were really good. The house needed work, which I said on the MLS, but the photos looked good.
I have been called about that house as a comp 4 times now by appraisers. Each time they said "did it really need work because the photos look good." I had to tell them about the odd floor plan, the owner self done crooked tile, etc.
The house just two lots up is for sale and it is decked out and nice. My sold home was comp. I had been in the one currently under contract and told the appraiser all the differences between the two. It felt weird trying to get another house to value, but you would never know by looking at the photos the huge discrepancy in quality. I honestly felt the other house (not my listing) was priced well, but I know it won't appraise because of my listing and the appraiser's lack of knowledge about the differences in the two.
And if the appraiser using your sale does not adjust for quality and a possible functional obsolescence (odd floorplan) there REALLY is a problem. I assume, however, that the appraiser uses the information from you wisely.
An appraisal is one person's opinion of value, at the time of the appraisal.
Two appraisals on the same property are not likely to have the same outcome.
Square footage/lot size are critical elements of an appraisal, as recorded in the county records. Whiles this is usually the only information available, it is not always accurate. Appraisers are at a disadvantage because they do not know what's inside of the homes they are using as comps. They do not know the floor plan, condition or updating. They do not know if the basement has 5' ceilings.
MLS listings say the kitchen is updated. What it fails to say is that the updating occured 20 years ago or that the new kitchen cost $10K in one house and $75K in another. And the neighborhood supports the later.
Short sales are rarely derilct properties. Foreclosed homes may or may not be derilict. No mention is made of Relocation company-owned properties which are often the best values in the marketplace. Knowing why a property sold for what it did, whenit did, is critical.
I have no idea how an appraiser can certify that chosen comparable sales
are the most similar to the subject properties, when they have not seen/walked the comparables. It seems a holdover from days gone bye, when homeowners were not obsessed with Toto toilets, professional grade appliances, EE furnaces/AC and on and on. And of course, all of this stuff, like cars, depreciates the minute it leaves the warehouse.
There should be a data base for each zip code containing objective opinions of all properties, for sale based upon common criteria, as viewed by someone who has actually seen the property.
Appraisers could subscribe to this data base for a nominal fee. I think the market would bear a surcharge for an appraisal that relies upon better information.
This is a business opportunity for someone, somewhere.
Many MLS listings have interior photographs. We also talk to realtors, sellers and buyers about their properties and we can usually tell from the tax records what type of sale it was by looking at the seller.
The house just two lots up is for sale and it is decked out and nice. My sold home was comp. I had been in the one currently under contract and told the appraiser all the differences between the two. It felt weird trying to get another house to value, but you would never know by looking at the photos the huge discrepancy in quality. I honestly felt the other house (not my listing) was priced well, but I know it won't appraise because of my listing and the appraiser's lack of knowledge about the differences in the two.
At least the appraiser called you.........
You didn't mention that the ceiling in the basement was only 5', did you?
Seriously now, I appreciate the pressure of being an appraiser and relying on MLS descriptions and hearsay. It's a miracle anything appraises, given the process.
And if the appraiser using your sale does not adjust for quality and a possible functional obsolescence (odd floorplan) there REALLY is a problem. I assume, however, that the appraiser uses the information from you wisely.
Actually I think the last one that called me was the best. He was the one trying to comp out the house two lots up. It was probably the longest conversation I had with an appraiser. He was trying really hard to be as thorough and accurate as possible.
He was going to adjust no doubt, but it was clear from the conversation that he couldn't get as high as he needed to for the offer price. It was going to be a low appraisal.
Actually I think the last one that called me was the best. He was the one trying to comp out the house two lots up. It was probably the longest conversation I had with an appraiser. He was trying really hard to be as thorough and accurate as possible.
He was going to adjust no doubt, but it was clear from the conversation that he couldn't get as high as he needed to for the offer price. It was going to be a low appraisal.
Pardon me, but there is no such thing as a "low appraisal". It is an appraisal that does not meet the sales price. Perhaps the sales price is high?
I hear stories that this or that lender is ordering the appraiser to knock 5,10, 20, whatever % , off the appriased number.
Not wuite sure how an appraiser would do this. For now, I continue to think, that this is "old real estate agent and attorney stories" as opposed to what's really going on.
I hear stories that this or that lender is ordering the appraiser to knock 5,10, 20, whatever % , off the appriased number.
Not wuite sure how an appraiser would do this. For now, I continue to think, that this is "old real estate agent and attorney stories" as opposed to what's really going on.
Care to weigh in?
I haven't experienced it myself, but I would imagine that this could happen. After all, it is similar to the days where lenders were pressuring appraisers to INcrease the value.
In my opinion, UNDER valuating is just as bad as OVER valuating. We are expected to give an unbiased opinion of value. As an appraiser, I am not supposed to care what the lenders' needs are ..... my job is to report the market and my opinion of value. Nothing more ..... nothing less.
Perhaps withholding the contract value from the appraiser would contribute towards the integrity of the outcome.
I disagree. For starters, FNMA requires us to analyze the contract because there may be things in there that could affect the value.
But the most important thing is that as appraisers we have a fiduciary responsibility. We have a Code of Conduct (USPAP) which is the law (adopted by all states) by which we are required to abide. We certify our integrity and independence on each appraisal report.
If an appraiser cannot conduct him/herself accordingly and cannot seperate him/herself from knowing the transaction price, that person has no business being in this business.
We need to enforce USPAP ....... that is all we need to do to ensure a pool of competent, professional and ethical appraisers.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
