Lower appraisals are one of the biggest problems sellers, buyers and Realtors are faced with today. Because mortgage amounts are based on an appraiser's estimates of value, appraisals are a crucial cog in the machinery of the housing market. That cog may have ground to a halt recently.
Newly enacted federal government guidelines compounded by lenders putting pressure on appraisers to be very cautious of plummeting home values have crippled the already slow housing recovery. When a home is placed on the market, normally the fair market value is considered to be comparable to other homes sold at "arms length transaction" prices. In today's market these transactions are few and appraisers will use distressed, foreclosed or short sale prices as com parables.
An inappropriate approach by an appraiser using sales of distressed properties drives down prices on everything. A person not under water but needing to sell may be subject to the perceived value of an unjust appraisal because of the foreclosure down the street. I and many other Realtors have listed homes that would have closed at list price only to be appraised lower due to a foreclosed or short sale closing occurring during our marketing activity or while we were in contract waiting to close.
I may tweak a few appraisers with this post but I have to say it. Much of the housing bubble run up was directly related to over valued appraisals. Appraisers today are being more cautious. The bubble or run up in values and the low ball appraisal are results of pressure on appraisers from lenders. At some point the dog needs to wag it's own tail and begin to take control of itself.
For more on selling your home, home values, mortgage rates and available properties call me directly at 561-306-6736, email me directly , visit me on Twitter , or go to ges-realty.com
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