Realtors blame appraisers for slow housing rebound
Filed under: Real Estate
Lawrence Yun, the "Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales," Yun said in a press release. "In the past month, stories of appraisal problems have been snowballing from across the country with many contracts falling through at the last moment. There is danger of a delayed housing market recovery and a further rise in foreclosures if the appraisal problems are not quickly corrected."
OK, Lawrence (Is it OK if I call you Lawrence?). Here's the problem: If you had been complaining about overly optimistic appraisals during the housing boom, you might have a point here. But the fact is that you didn't. You thought the corruption of the appraisal industry was a good thing because it kept home prices rising, and made NAR members rich. Now that the real estate bubble has crashed and appraisers are being more conservative, you're whining like a woman in an Ibsen play.Fortunately, The Appraisal Institute whacked Yun wiith a rolled up newspaper and sent him to his doghouse with a follow-up press release: "We take offense with the notion that an appraisal is only good if it happens to come in at the sales price. That mentality helped cause the mortgage meltdown to begin with," said the Appraisal Institute's Bill Garber. "The fact that the value reflected in the appraisal does not match the sales price is not the fault of the appraisal but a result of the market today."
Yep. It sure is.
What's appalling is how much influence that National Association of Realtors continues to have in Washington.
Reader Comments (Page 1 of 1)
6-29-2009 @ 7:27PM
BELLCORD said...
OLD APPRAISER JOKE: ASK AN APPRAISER WHAT'S TWO PLUS TWO ?..ANSWER "WHAT DO YA WANT IT TO BE ?"...............NOT ANYMORE MAN.....
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6-29-2009 @ 8:21PM
Mollie Snell said...
The new issue is the market is not able to be a market. The price of a home should be what the seller is willing to pay and not what an appraiser says it is worth. It is worth what the buyer is willing to pay! Appraisers are not appraising houses at market value, they are appraising below market value now to an extreme and sellers are having to lose their equity in their homes. They are not looking at all the upgrades put into homes. They are looking at the lowest priced house and there is the sq ft price. The only winner right now is the buyer if he does not have a house to sell.
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6-29-2009 @ 10:35PM
Brenda said...
Unfortunately, some appraisers are only doing appraisals based on square footage comps, not on upgrades etc. All we ask is for a "true market value appraisal."
It's upsetting that an appraiser wants a copy of the listing or the contract before coming up with a value. They should not even have that available. They need to appraise the home based on true market value, based on homes sold. Unless a neighborhood has had lots of foreclosures, the foreclosures should not be used as comparables. Buyers want a true appraisal, but banks, want to make sure the property is not appraised any higher than what it is being sold for.
Maybe banks just want excuses for not making loans--since they are the ones who order the appraisals.
6-30-2009 @ 8:45AM
Burned said...
Appraisers? Try Inspectors! My realtor said "You don't need to bother with a home inspection, just get an appraisal, it will save $300 at closing!" Being a first time buyer, I took that lousy advice. Six months later, I had a fire. If I had gotten that inspection, I would have found out the house has aluminum wiring and would not have made the purchase. (the realtor wouldn't have gotten her commission either, which is why she steered me away from the inspection!) Hard lesson learned! GET AN INSPECTION ALONG WITH THAT APPRAISAL!
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6-30-2009 @ 12:34AM
CaliK said...
I feel for you BUT, do you have a brain? Yes, your agent should have recommended a home inspection but come on anyone with a 8th grade education should know to have an inspection. Reminds me of the Carfax commercial. Did she show you a letter from the previous owner saying “it’s a really neet house” or did they show you the house faux puppet?
6-30-2009 @ 12:32AM
aHOMEgal said...
I have been an agent for 15+ years int his industry and hate to hear stories like yours. I am so sorry you had such a bad experience with your agent - what was told to you I feel was not only ignorant, but unethical as well. Having some personal references for your agent is always recommended. Ask around, there are ALWAYS people who can tell you who they enjoyed working with.
6-30-2009 @ 1:16AM
Bill Johnson said...
Your Real Estate Agent gave you some bad advice, but the aluminum wiring did not cause the fire--faulty installation or some other cause that may have been detectable caused the fire. I have had aluminum wiring as have all my neighbors for more than 35years without a fire.
7-10-2009 @ 11:21PM
roseinvst said...
I agree about the appraisers. My sister almost lost the buyer on her house at the last moment. Her company moved her to another state, it took her 9 months to get a buyer. Her company had her house appraised at $138,000 (and companies usually appraise low if they are paying out money) and she had it sold for $137,000 and the appraiser comes in at $135,000 and the buyers had to come up with another $2500. They wanted to back out and their lender told them it was a good buy no matter what the appraiser said. I totally agree that the appraisers are a big problem right now. They say they don't use the comps with foreclosures but they lie.
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6-29-2009 @ 10:17PM
Donovan said...
The days of the you scratch my back, I'll scratch yours between appraisers, Real Estate agents, and mortgage brokers is OVER folks.
The Real Estate agent needs to make the seller happy, by suggesting a sales price the seller would be willing to accept. Therefore, the agent gets the listing contract, and hopefully a sale.
Now it use to be that a Realtor and (private) appraiser could play the lets make a deal game. The Realtor would just tell the (private) appraiser, "I need this property to appraise for x amount of dollars in order for my buyers to get the mortgage" So, if the (private) appraiser wanted to continue getting appraisal jobs, and not get black balled by Realtors word of mouth. The (private) appraiser would push the home value numbers as high as possible. This made the Realtor happy, and kept the (private) appraiser in business. This also held true with (private) home inspectors. If a home inspector killed to many sales deals because of bad report results. Once again, the home inspector could get black balled by the Realtors word of mouth.
Now that the banks are for the most part using (in house) their own appraisers, the appraisers need to keep the bank/lenders happy. Not the Real Estate agents.
I've found that having a home inspection, and home value contingency clause in the purchase contract works quite well. It protects me/you as the buyer. And I don't care how much you love the home you just found. ALWAYS have a home inspection done. Even if the home is an "as is" sale. Insist on an inspection. If for any reason, your told an inspection can not be done, or is not allowed. Don't walk, you need to RUN away from that house.
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6-30-2009 @ 8:56AM
lilrdvet2 said...
To CaliK: Did you miss the part about "being a first time buyer"? Guess so...yet another example of "blame the victim" mentality. ::shaking head::
To Bill Johnson: Just so you know, buy all accounts, including the Fire Department...you and your neighbors are living in a ticking time bomb. Aluminum wiring contracts and expands and becomes loose over time, unlike cooper. Might want to read up...I'm frightened for you all...Don't get me wrong, I do love the house otherwise.
Otherwise, thanks for the input and the shoulder...I was simply saying...Don't blame the appaisers, blame the greedy realtors and the shading mortgage lenders trying to make a buck in these hard times. They cleaned up at our expense, by any means possible until the market crashed. Too bad, how sad...NOT!
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