Are Home Appraisals Finally Playing Catch-Up?

Are Appraisals Finally Playing Catch-Up?

We have been blaming low appraisals for derailing transactions over the last few years. But now that home prices are heating up across the country. Are appraisals still coming in lower than the agreed-upon sales price?

Even with prices rising and the number of foreclosures falling, some appraisers say assigning a value to a property is not getting any easier. One of the big reasons, they say, is because of low inventories in many markets. “An under supply of available homes has prompted bidding wars above list price, a price that is not necessarily justified by an appraisal,” The Chicago Tribune reports.

Consumers “don’t always value us in a friendly light because we are the person coming in and saying yea or nay, and we’ve been the bearer of bad news for too many years,” says Sharon Bagby, an appraiser at Crystal Lake Appraisal Service Inc. “Home owners don’t really know where the values are. They’re hearing some really rosy values in some markets, but we have to work with the value that’s there.”

Appraisers say they are using sound data to base their valuations, including motivations of buyers and sellers. Based on your experiences, what are your comments?

Source: “As housing warms up, appraisers feel the heat,” The Chicago Tribune (June 21, 2013)