I really have a genuine empathy for appraisers. I know that there job is difficult and tedious. I also know that they are currently faced with great challenges.
The currently downward market presents a challenge that seems to be insurmountable. When given the task of appraising a home that is currently occupied and in good or great condition, appraisers have a difficult time giving value to that home's improvements and it's condition. They must pull comparables and the vast majority of comparables are REOs. Those homes are in dis-repair and vacant and have lost significant value. Appraisers must also pull available properties in the market. Those homes also are mostly REOs and are also vacant and often in disrepair.
If a seller needs to sell in this market, they are faced with the fact that they must not only compete with foreclosures, but they must endure the indignity of dealing with an appraisal that won't give them enough credit for maintaining or improving their home. Appraisers are forced to perpetuate this downward market by not allowing sellers to have reasonable value given to their upgrades. I'm not talking about retail value for those improvements, I'm talking about a home with a pool, patio cover, new carpet, freshly painted, new air conditioner, new hot water heater, new stone counters, well maintained, and pridefully lived in only getting appraised at $12,000 more than a model match that was gutted and had none of those improvements. It had no appliances, no pool, no landscaping, etc.
The appraiser explained that his hands were tied. He had to use comparables that were deficient and couldn't give sufficient value to the improvements. The seller, that understands the market is down strongly, has no choice but to accept this appraisal, because the seller needs to move. The appraisal really can't be challenged, because of the strict new guidelines limiting access to them.
I believe that appraisers need to be kept independant of Realtor and lender influence, but I also believe that they need to be given the ability to think logically and utilize the skills they have learned over the years. If appraisers can't give appropriate value to condition or improvements, our market will be perpetually forced downward. That must end.
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