I have complained about appraisers a lot and even a time or two here. Today I listened to a appraiser whom I gained a lot of respect for today. He dispelled some things that I have heard from other appraisers.
Just last week an appraiser told a colleague that he wouldn’t appraise any house above list price and no one else would either. Well that is a lie. I have had two homes go above list price and not for closing costs. Both appraisals came in. Lenders may have their own rules though.
One appraiser said if the price dropped and there was an offer on the home after 24 hours later, he wouldn’t appraise it. The speaker said what I had thought, “The appraiser isn’t appraising anything.” He said it wasn’t a rule and he should still be doing an analysis.
Some other points from the speaker,
- To get comparables outside of one mile he has to give a written reason.
- The same if he goes beyond 6 months and he has gone up to 18 months back.
- Appraisers don’t take tax value into account.
- Short sales are not counted towards comps. (I have heard this from another appraiser) part of the reason is that the house is no longer available. Availability comes into play. This is one reason why I look at what the ACTIVE competition is for a listing.
- An appraiser has to contact at least one party from each comparable he uses. I get these calls often and they will ask the condition and if there were any concessions.
So I gained some respect back for the profession of appraisers. Just like any other field you have some bad ones out there and you just hope you get to work with a good one. With some deals you will have the option of another appraisal but in some of those cases the lender could make it a condition that the second appraisal come in at a certain percentage above the previous one, not just to the agreed upon price.
photo via http://www.flickr.com/photos/orangeacid
