Appraisers and the Chicken Little Syndrome

By
Real Estate Agent with Keller Williams Realty Professionals BK694889

Chicken Little is really a story about many of today's appraisers, please notice I did not say all. I recently put a home on the market in Fort Lauderdale. The house had three offers the first three weeks and now is under contract for the second time, all offers were within $10,000 of the $189,000 asking price. This means as a Realtor I priced it correctly, the people who have a vote, the agents who show it, and the buyers who make offers all gave me a thumbs up. The area of Fort Lauderdale that the home is in, is a solid neighborhood where the percentage of homes on the market is lower than in the Fort Lauderdale market as a whole. This means over the last 6 months months, fewer homes have been listed, fewer homes have sold, and to some appraisers this makes for a nightmare, please notice I said some. Appraiser one comes to the house I will refer to him as John, as I feel Chicken Little would be rude. I have all the Fort Lauderdale comps I used to price the home, the most recent sales in the area even though some were too old for him to use, the four most recent sales which are closest, and numerous other trends and graphs, which at least he is thankful for. He sites the lack of activity in the area, as a negative, it certainly is for the ease of his job, and the home misses appraisal by $40,000. Have no fear it has since appraised with a new buyer for exactly what we needed. My concern here is that so many appraisers are reading articles about the second decline coming that they feel they must appraise a house lower than the last sale. Chicken Little is not willing to become Batman and say, "three offers all in the same range, whowwy zowwy slam bammm, maybe, just maybe, some neighborhoods will recover differently than the national media will say. As Realtors we know our local markets better than anyone. Give them the comps, tell them about the inside of the sold homes, if the house was a foreclosed mess make sure they know it. Do Not let appraisers make assumptions about your property before they walk in the door. We have always worked together and we need to understand that their jobs are as difficult these days as ours but lets be professionals and help them stand up when we think their information may be skewed incorrectly. In Fort Lauderdale we have seen the inventory of homes for sale drop dramtically, some agents are actually complaining there is nothing of quality to show, and yet in most areas when a foreclosed property comes on the market it is listed for a lower price that the last sale and has multiple offers in a a matter of days. It may not be just the appraisers who are behaving like Chicken Little. Realtors who are pricing these homes are saying "you must be lower than the last sale". Have no fear, the day is coming and I did see a Fort Lauderdale Realtor use this in an ad the otherday, where you can proudly say "I just sold a home for 10% more than the 12 month average in your neighborhood and closed in 30 days". The more we can say this the sooner appraisers and realtors will feel the energy ofa marekt that is turning. Interested in looking at the Fort Lauderdale market we are always here to help, visit us at www.FortLauderdaleGroup.com

  

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Ambassador
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Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros

I have seen appraiser differ by 20 percent on some homes wich equates to over 100k in some cases. I think the new laws have driven area experts out of the business.

Apr 04, 2010 03:45 AM #1
Ambassador
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Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

Same here.  I actually paid for an appraisal myself before the buyer's appraisal came in.

My appraisal - $365,000

Buyer's appraisal - $395,000

My frustration - Priceless...........

Apr 04, 2010 03:49 AM #2
Rainer
179,028
Randy Benefield
Trademark Property Services & Real Estate Inc., CalBRE, 01976861, 01442405 - Petaluma, CA

I am also seeing the same issue in Sonoma County California. The biggest problem is the banks hire an appraiser who is next in line and many times the Appraiser is from out of area. Therefore he/she does not know the neighborhoods and the value of Eastside and Historic Westside in Petaluma. It is a real problem.

Apr 04, 2010 04:01 AM #3
Rainmaker
1,282,998
Edward & Celia Maddox
The Celtic Connection Realty - Queen Creek, AZ
EXPERIENCE & INTEGRITY - WE TAKE THE HIGH ROAD

Thanks for update. We always learn a lot of new information from Active Rain blogs.

Apr 04, 2010 04:01 AM #4
Rainer
26,646
Eric Miller
Keller Williams Realty Professionals - Fort Lauderdale, FL
Award Winning Fort Lauderdale Real Estate

Isn't it great to know your not alone, thank you all.  By the way I have found the easiest way to challendge an appraisel is have the same book of statistic ready to go to the appraisers boss, and then the bank. Sometimes in the least, it may get the bank to pay for another appraisel.

Apr 05, 2010 12:04 AM #5
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Eric Miller

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