Find Real Estate Agents and Homes for Sale


Real Estate News --> Washington News

Low appraisals that don't reflect rising markets are ruining deals


Real estate professionals say appraisals sometimes come in thousands of dollars below the price that home buyers and sellers have agreed upon. WASHINGTON — Are some appraisers failing to see the improvements in real estate values underway in local markets that have recently bottomed out and turned positive? When multiple bids push a house price thousands of dollars above what the seller is ...


Archived Story

WASHINGTON — Are some appraisers failing to see the improvements in real estate values underway in local markets that have recently bottomed out and turned positive? When multiple bids push a house price thousands of dollars above what the seller is asking — not unusual in neighborhoods where demand is particularly robust — are appraisers still coming in with values below the agreed-upon price? Appraiser reluctance to report local appreciation is becoming a significant complication in sales transactions, say a growing number of mortgage loan officers and realty agentsIn a new poll of its members, the National Assnof Realtors found that 33% of their salespeople reported appraisal problems during the month of MayMoe Veissi, president of the association, said poor appraising "in markets that are no longer in decline is the single most important" valuation obstacle to seeing a real recoveryEven appraisal experts concede that this is a troubling issueFrank Gregoire, former chairman of the Florida Real Estate Appraisal Board and an appraiser in StPetersburg, says that many appraisers are reluctant to make the upward adjustments they know to be justified by recent positive appreciation trends because they fear criticism that they are potentially overvaluing the property — exposing lender clients to costly "buy-back" demands by Fannie Mae or Freddie Mac, or future litigationvar adSkipCounter = 0; Even if they have the data to support adjustments reflecting positive trends that affect value — pending home sales and new listings of similar houses at higher prices, for example — "they take the easy way out" and go with a lower valuation so as not to upset hyper-cautious reviewers at the appraisal management companies that now control the bulk of home real estate appraisal assignments, Gregoire saidOne appraiser in his area recently assembled strong supporting data to make an upward adjustment to a valuation based on recent sales activity on comparable housesWhen he delivered the report to the appraisal management company that hired him, however, an official of the firm sent it back immediately with instructions to "revisit" the upward adjustment — in other words, get rid of itJoseph Petrowsky, owner of Right Trac Financial Group Inc., a Manchester, Conn., mortgage company, says too often valuations in upward-trending markets "aren't catching up with the new values, let alone a property that was involved in a bidding war." He cites a series of recent loan applications where the appraisal was thousands of dollars below the agreed-upon sales price, endangering or blowing the dealsIn one case, the buyer offered $312,500 but the appraisal came in at just $280,000, despite readily available evidence that the local market has experienced appreciation in recent months"Appraisers are scared to death" to report rising values, Petrowsky said"I talk to them and they are beside themselvesThey feel they have to [deliver] appraisals they know should be higher." Much worse, though, is the effect on sellers and buyersWhen appraisals comes in much lower than the mutually agreed-upon price, buyers may need to revise their loan requests or renegotiate the purchase price with unhappy sellersDennis Smith, a co-owner of Stratis Financial Corpin Huntington Beach, says the problem is magnified when the appraiser assigned by the management company travels from 30 or 40 miles away and has no insights into neighborhood appreciation trends that may be relatively recentHe cited an example in which a client saw a bidding war — four offers that pushed the price from the listed $350,000 to $375,000 — but the out-of-town appraiser would not take this into consideration in arriving at the final valuationSara WStephens, president of the Appraisal Institute, the largest association in the industry, says it is every appraiser's professional duty to arrive at valuations that "reflect the market," including recent changes — whether positive or negative — if they can be verified with authoritative and accurate dataHow can buyers and sellers guard against the see-no-appreciation problem? Tops on the list: Make sure the realty agents on both sides of your transaction have assembled accurate data on comparable sales or pending sales that demonstrate how the market has changed in the last six months or lessThen make sure the appraiser sees the dataYour purchase or sale doesn't have to be jeopardized simply because the appraiser doesn't have — or chooses not to collect — all the relevant recent factskenharney@earthlink.net Distributed by Washington Post Writers Group./* Javascript deferred */var addthis_options = "digg, twitter, facebook, stumbleupon, delicious, friendfeed, buzz, slashdot, reddit, mixx, fark, linkedin, aim, google, myspace, newsvine, technorati, tumblr, typepad, wordpress, more";var addthis_exclude = "print";var addthis_pub = "archivedigger"; function fixDoubleButtons() { if (jQuery('#mod-sm-badge-top .st_pm_button .stButton').size() == 0) { setTimeout('fixDoubleButtons();', 500); return; } var query = '#mod-sm-badge-top .shareThisEmailIcon .st_pm_button .stButton'; if (jQuery(query).size() == 2) jQuery(query + ':eq(1)').remove(); query = '#mod-sm-badge-top .shareThisShareThisCompact .st_pm_button .stButton'; if (jQuery(query).size() == 2) jQuery(query + ':eq(1)').remove(); query = '#mod-sm-badge-bottom .shareThisEmailIcon .st_pm_button .stButton'; if (jQuery(query).size() == 2) jQuery(query + ':eq(1)').remove(); query = '#mod-sm-badge-bottom .shareThisShareThisCompact .st_pm_button .stButton'; if (jQuery(query).size() == 2) jQuery(query + ':eq(1)').remove(); } function removeCommentsButton() { if (jQuery('.comments-container .comments-counter').size() == 0) { setTimeout('removeCommentsButton();', 500); return; } jQuery('.comments-container').empty(); jQuery('.comments-container').remove(); } removeCommentsButton(); FEATUREDJohnny Cash's dark California daysHow not to say the wrong thingInfiltrating Southern California biker gangsMORE:Seizure Led to FloJo's DeathHis 104 scores make his caseBrutal Murder by Teen-Age Girls Adds to Britons' ShockComaneci Confirms Suicide Attempt, Magazine SaysAdvertisement if(navigator.userAgent.indexOf("MSIE") >= 0){ setTimeout(function() { //Fixed IE issue- Ref Bug 17996 var openxframe= frames["openxi-339767"].document; openxframe.open(); openxframe.write('if (!window.OX_ads) { OX_ads = []; } OX_ads.push({ "auid" : "339767" });'); window.openxframe.close();; },200); }else{ var openxframe= frames["openxi-339767"].document; openxframe.open(); openxframe.write('if (!window.OX_ads) { OX_ads = []; } OX_ads.push({ "auid" : "339767" });'); window.openxframe.close();; } FROM THE ARCHIVESFederal Reserve's proposed home appraisal rules may not...October 31, 2010Fannie Mae to prohibit lenders from changing home appraisalsJuly 18, 2010Shadow falls over appraisal systemNovember 11, 2007Mystery Parkland Bid Questioned : Dispute Reflects...February 24, 1985MORE STORIES ABOUTBusinessReal_estateReal Estate

Trending Washington News:


  • In a Trend Likely to Continue, More Hispanics are Buying Homes
  • How two local movie producers used real estate to fund their films
  • Washington DC State of the Market
  • Cover story: Ringing out the year on a positive note
  • How is the D.C. Real Estate Market Faring so Far in 2016?
  • 702 Washington St., Bath
  • New Amazon office building sells for $313M in one of Seattle region’s priciest real estate deals
  • Analyst Coverage: Pennsylvania Real Estate Investment Trust (NYSE:PEI)
  • Millions of dogs need homes. Why is it sometimes hard to adopt one?
  • Washington Real Estate goes ex-dividend on Monday
  • 222 N Washington Ave
  • Names & Faces -- Gazette.Net
  • Plans move forward for marina, homes near Saugatuck Dunes
  • 6 Commercial Real Estate MegaTrends Identified At 18th Annual Washington, D.C. TrendLines®
  • MetLife, Norges Bank Venture Buys Washington Office Buildings
  • State of the State: Washington
  • Buy Part of This Bar/Coffeeshop/Restaurant/Hardware Store
  • Runstad Center molds tomorrow’s real estate leaders
  • Donald Trump Is Said to Intend to Keep a Stake in His Business
  • Real Estate Urges Pro-Growth Tax Reform in Senate Letter