When legislators regulate a business they clearly know nothing about the results are rarely if ever good!
I have a transaction closing this afternoon that has been an absolute nightmare. Why? Because under the new regulations regarding appraisals the appreisers seemingly have no accountability. Those of you reading this who are good professional appraisers know that what's happening is hurting you too!
The subject property is a townhouse that has been totally renovated. New kitchen cabinets, appliances, flooring, carpet, new bathrooms, a total renovation. There were recent sold townhouses a few blocks away. Similar in age but a little larger. A pretty easy adjustment. Did the appraiser use those??? No, he went a few miles away across a major highway to a different town, totally different market. As a matter of fact, one of the comps he used was a duplex with no HOA and two levels rather than three like the subject property.
About the description of the property. He stated the kitchen renovation was 6-10 years old. Really? There was still styrofoam and tape from packing in the refrigerator. The shiny new stove had clearly never had any food on it. The cabinets had clearly just been installed. The bathroom description said renovation was 1-3 years. Again, it was clear the toilets had never been used. Sink tops and vanities looked fresh off the showroom floor. Did I mention the brand new heat pump. Normally that would be maintenance however these townhomes originally did not have AC. They were built with electric baseboard heat.
In the appraisal the appraiser also cited an active listing across the court listed at the same price and with a long time on the market. I went through that unit. It needed new carpet. The front windows had broken seals and were clouded. The front foundation wall was damp and slightly bowed and although it did have a heat pump the unit was very old and either close to or past the end of it's life expectancy.
These issues should be of major concern to both my Realtor friends and members of the public. We are seeing appraisers from different areas who are not familiar with the local market conditions giving values that clearly have nothing to do with available comparables.
Yes we are finally going to settle this transaction but not without a lot of jumping through hoops that should never have been there. My hope is that those who are reading this, especially members of the public would let your concerns be known to your legislators. With the market we're in, depending on where you are an inaccurate appraisal can make the difference between being able to sell your home as a standard sale or being forced into the difficulty of being involved in a short sale.
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