As many of you know, I used to be a real estate appraiser (and in a way, always will be). Appraisers are paid for their professional opinions, honesty, and expertise. If they are lacking in any of those three areas, well, they’re just not cut out for the job. I’ve heard a few stories about appraisers lately that made me cringe.
The Good: [Honest and expert] Appraisers not only protect banks from lending more than a home’s value, they also protect the buyer. Let’s say that a buyer is in contract on a home for $500K and the appraisal comes back at $400K. As a result, the buyer does not get their loan and they get angry with the appraiser. In actuality, they should be extremely thankful that the appraiser saved their butts from overpaying by 25%, but appraisers are rarely thanked. Instead, the appraiser gets bashed from the real estate agent (thanks for killing my deal), the buyer (hey, thanks, I lost my home), the seller (you imbecile, I was just about to cash in), and the loan officer (thanks pal, I’m not going to get my fee). If the appraiser is truly an expert, there should be nothing stopping them from doing honest work, including pressure from any of the aforementioned parties. Unfortunately, appraisers can be coerced and threatened (we’re not going to use your services anymore if you don’t hit our number!). This is the reason new regulations are in effect that limit who can talk to an appraiser.
The old days: "If you don't hit my number we're never using your services again!"
Let’s face it, if you have three different appraisals on a property, you’ll get three different values. Read the rest of this entry ?
