Let's face it - we can not count on our Government to fix the issues we face!
That's not a political statement - it's a contradiction to think that Government oversight is going to promote growth in any industry. Is it better to have 2 or 3 companies who provide a service or product extremely well, or open it up to 20 companies that provide marginal service and make major mistakes? You may be getting a better price, but are the results really what's best for you?
Our next two closings are both having appraisal issues...again. The funny thing, it is for two different reasons - the closing we have where we represent the buyer appraised for $80k more than we paid, and our listing appraisal came in $20k below our sales price - and in both situations our clients are upset!
Why would a buyer whose purchase appraised $80k over what they paid for it be upset? How about the fact that the appraiser had the wrong sq. ft. for their home, used comps that had finishes that were missing in the report, and even had the wrong transfer prices. Do you think the home is worth what that appraiser says it is even with all those major errors? The home should have appraised at their contract price, no doubt about that, even though they were trying to get it for a lower price. However, with the errors in the report already, even an adjustment by the appraiser would second guess the actual value.
In our listing, the seller requested that we get an appraisal before we listed the property to avoid any issues in a purchase appraisal. This was in the begining of July - by the end of July we had a contract on the property and the buyers appraisal was done on the 7th of August. The buyers appraiser valued the property $25k less than the appraiser we hired just one month before. This property has a horse barn and 3 paddocks, so it is very unique to a certain buyer. So when we compared the appraisals, we noticed that one appraiser valued the barn and paddocks at $50k and the other valued them at $30k - huh? Did I mention the second appraiser did not even look in the barn? Not only that, but he mentioned that our area is experiencing a price decline - what? Our MLS system just reported an increase in prices of .5% and reported an upward trend in housing...yet this guys stated we are declining. Not to mention that in a comp he valued a "Gourmet" kitchen to be worth $15k more than the Barn and fencing that our listing has. Do you know what that gourmet kitchen has that we don't - granite counter tops! You have got to be kidding me!
And you know what we have been told...there is nothing we can do about it. Even when there are major discrepancies in the appraisal, we are told that we can not question their work. Now that our Government makes banks outsource their appraisals to independent third parties so that a handful of companies do not get all the work, we get reports full of errors and omissions and are told to take our medicine like a man. Funny, that sounds a lot like everything else that seems to be going on right now...
I am not trying to influence our appraisals...I just want to have the right information and hold the appraiser accountable for the data that they are using. One would think that two individuals in the same field would value something like a barn relatively the same. If they had a disagreement in value then the fact that a buyer was willing to pay a certain amount for it should tell them what the actual value of that item is worth. Even if the appraisal is amended, does the buyer still feel like they are receiving a fair shake now?
Get it right the first time and we will not have to waste time covering up your mess!
Jimmy Mulhern
http://www.HomesInVirginia.net
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