Appraisers Are Trump
October 2nd, 2008 categories: Real Estate News, opinion
The real estate game has changed.
- What you can get a buyer to pay for your home doesn’t matter.
- How much money you need to go to settlement with doesn’t matter.
- Many of your homes details don’t matter.
When selling your home, the price you can get should be based upon what YOU think it is worth. However, buyers will only pay what they feel THEY think it is worth. The delima is that the bank will only give a loan for what THE APPRAISER thinks it is worth.
The bank figures out how much it really is worth by having an appraisal done on the property. They view your homes size and features in comparison to comparable properties in the local area that have recently sold to try to figure out your homes value. This is becoming more of an issue in the current market conditions since prices have declined.
How will prices ever increase in value if appraisals come in a little higher than previous sales? What comparable properties are appraisers to use if the only homes that compare to your home are foreclosures and short sales?
These are some of the issues we are currently dealing with in our market. It is very important in this market to be aware of these issues when pricing your home. Features do matter, square footage and acreage matters, but most importantly not overpricing your home matters since you will not be getting rid of your home for more than the bank is willing to lend which depends on the appraisal value.
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Appraisers are Trump alright…In Northwest Arizona we’re seeing the appraisals coming in just above the contract price of the foreclosure properties. It’s drivin our values down 42%. I asked the question of master appraiser, “should these appraisers be using foreclosure comps?” The MA said, “no!” Local appraisers are directed to use a declining market calulation to determin a non-REO properties value. The problem, The MA says is that this takes more brain power and use of mathmatical calculations than the avg. appraiser is willing to do.