This week in our sales meeting some agents complained about having problems with appraisals coming in low, even after they based their asking price on a recent CMA; priced the property agressively and the buyers still reduced the sale price further.
That was when we were alerted to the fact that appraisers were using 90 days old comps. However in some areas and some types of properties are selling at one or two homes per year. So for those comps that are over 90 days old, appraisers estimate 1% per month decline in value.
Many of us find this trend curious, because when the market was increasing at 2-4% and we would try to get appraisers to adjust for the increase in value, they would tell us that it was against lending rules. They would say that the appraisal had to be based strictly on closed sales.
Has anyone come across this trend in other markets? Are there some appraisers or mortgage brokers who can shed some light on this trend?
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