Almost every Connecticut real estate closing involves getting an appraisal done on the house being purchased or refinanced. The appraisal is ordered by the lender, but paid for by the borrower as a closing costs. A basic understanding fo the appraisal process is very important if you are selling, buying or refinancing a piece of reale state in Connecticut, The appraisers are licensed by the State of Connecticut and have to pass licensing and continuing education requirements. However the reality is that appraisals are very subjective, more "art" than "science." Different appraisers will come out with different appraised values for the same property. They may use different "comps" or comparable houses they use to determine the value of the subject house, or they may apply different "adjustments" for variations such as lot size, house size, number of rooms, etc.
There is an excellent article in the New York Times that discusses appraisals and variations among them. Appraisals are often reviewed internally by the lender, who may choose to adjust the results of the appraisal. More frequently than in the past, the appraisers are not local to the property they are appraising. Even in a small state like Connecticut, t here are huge variations in property values between adjacent towns or even within towns, between different neighborhoods.
Here is a quote from the article about one person's experience when refinancing. "The first appraisal in February was what he called an “absurdly low number even knowing the impact of the past few years,” so he asked the bank to send out another appraiser. That came in only slightly higher and left him unable to refinance. So he waited until this summer, when the flowers were blooming, and he and his wife walked the appraiser around the property. And that one? “It came in 50 percent higher than the previous ones,” he said. "
Here is a link to the article.
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