What in the world is going on with appraisals?
We have been in a declining market for 67 months. I recently put a house under agreement that was a new construction single family home on a 1 acre lot in a city. Two months ago the same house, the one next door was sold and appraised. It is now 2 months later and it appraised for 10,000 less.
The appraiser was from a different area and clearly doesn't know the city. To the appraiser defense there are not a lot of comparable properties. However, the appraiser used comparables that were not comparable at all. He used one street that had 83% multifamily homes on it. The other street he used was primarily owned by a housing authority. Both of these houses were on smaller lots and in very undesirable areas of the city. There were other homes that he could have used on the same street as the subject property but didn't.
I know the banking industry had to make changes as to the way appraisals are handled. However, appraisers should be familiar with an area before they take an assignment. Otherwise we are all going to continue to ask: What in the world is going on with appraisals?
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