WHY DOESN'T THE APPRAISER EVER APPRAISE ABOVE THE SALES PRICE?

Reblogger Roy Kelley
Real Estate Agent with Realty Group Referrals 16766

The lender will lend on the sales price or appraised value which ever is lower.

Original content by Conrad Allen 74203

It is a function of regulations plus lending practices.  The lender will lend on the sales price or appraised value which ever is lower.  If a home is selling for $200,000 and I appraise it for $250,000 the underwriters want to know why it sold so low?  What is wrong with it?  Write a three page addendum explaining the difference in value.  Please support this value with three other comparables within one mile of the subject property within the last six months.

This puts the appraiser in such an awful position.  There is no upside for the appraiser.  It is all downside and aggravation.  The exception to this is the FHA 203K program.  We have to appraise as is and then subject to the repairs being made.  Costs doesn't always equal value.  Does $30,000 in repairs add $30,000 in value.  It depends upon the repairs.

The duties of the appraiser are becoming ever expanding.  FHA and other governmental loans have the appraiser also becoming a home inspector.  Their fees have been depressed by the Appraisal Management Companies (AMC's).  It is no wonder that the appraisal ranks are decreasing.  Not having appraisal trainee designations have further suppressed new appraisers.  Requiring college degrees and other superfluous requirements deter people from entering the profession.  This will be a real problem in the future.

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Rainmaker
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Peter Mohylsky, SoWal Is HOME.
Gulf Place @ 30A - Santa Rosa Beach, FL
Let me help you find your path to the beach.

A good repost, I couldn't find a date on the original post. Any ideas?

Mar 17, 2016 07:17 PM #1
Rainmaker
2,224,173
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning Roy. Good choice for a re-blog. Conrad Allen understands the real estate and appraisal business and was the right person to ask the question and post this blog.

Mar 17, 2016 07:24 PM #2
Rainmaker
2,270,941
Anita Clark
ColdwellBanker SSK Realtors ~ 478.960.8055 - Warner Robins, GA
Realtor - Homes for Sale in Warner Robins GA

I have always been of the opinion that appraisers should not know the agreed upon sales price.  That eliminates the "target" number syndrome. Good reblog choice, Roy.

Mar 17, 2016 07:37 PM #3
Rainmaker
4,431,606
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good morning roy. This is a good post to reblog. Have  a good day.

Mar 17, 2016 09:46 PM #4
Rainmaker
5,221,811
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Please be sure to leave comments at the original blog by Conrad Allen

Mar 17, 2016 09:51 PM #5
Ambassador
4,007,266
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Seems like another system broken by excess government regulations and paperwork.

Mar 18, 2016 04:33 PM #6
Rainmaker
5,221,811
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Thank you very much for your comments. It is always good to hear from you.

Mar 20, 2016 02:49 AM #7
Rainer
1,756,848
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Roy.  That you for the reblog.

Mar 20, 2016 06:06 AM #8
Rainmaker
5,221,811
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Your comments are always welcome and are very much appreciated. Have an outstanding week and a very productive spring.

Mar 20, 2016 08:11 PM #9
Rainmaker
5,221,811
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
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