When the real estate market crashed a few years ago there was plenty of blame to pass around. Lenders, appraisers, real estate agents, consumers...fingers were pointing in every direction. Now we have lots of new rules and regulations that we all must follow to protect all of these individuals and corporations. But have we gone so far in regulating that we have lost sight of the goal?
I want to first look at the appraiser and highlight my recent interaction with one of them. On one of my recent listings, the appraiser gave a value $30,000 less than the list price. My first reaction was "how could this be?" I had reviewed my comps and while I thought it might be tight I never imagined the difference would be so great. Even the buyer and buyer's agent were surprised. I then reviewed the comps the appraiser used.
Out of the six comps he used, we only had two in common. Why? Because silly me used the most recent comps (which showed a higher value) and the appraiser used four older comps. Now I was always trained that the appraiser (especially FHA) would look at the most recent comps in the subdivision. Makes sense right? When I asked the appraiser about this he said that he could only use comps that were "the same square footage, same number of bedrooms and same general condition". Wow, I had never heard that before...how in the world could we ever get any comps was my question. The appraiser later confessed (after I went to the lender with these specifics) that he only tells that to real estate agents so they won't submit bad comps for his review. I could tell he had a great deal of respect for us real estate professionals.
Needless to say, the appraiser held fast to his low number because he did not think the area was recovering, even though the prices had increased in the last three months. In the end he helped keep a neighborhood's home values from increasing and caused the seller to lose $30,000. I guess he thought he had done his job and not put the bank at risk. I couldn't help but wonder if the banks/appraisers are artificially keeping home values down in certain areas, but the point of that would be...
Go to Work Now!
With our Real-Life Training program you increase your sales by increasing your knowledge and building your confidence. Isn't it about time you got real about YOUR success?
Comments(5)