Appraisers Overcomensating by Undervaluing.
Does anyone out there have any experience or anecdotes with appraisers drastically undervaluing properties? I have some personal experience with this recently in my attempts to refinance, and have been hearing startling stories of drastic neglect for what the market actually values things at being. Does anyone feel that there are forces putting pressure on…
Does anyone out there have any experience or anecdotes with appraisers drastically undervaluing properties? I have some personal experience with this recently in my attempts to refinance, and have been hearing startling stories of drastic neglect for what the market actually values things at being. Does anyone feel that there are forces putting pressure on appraisers to undervalue. I realize that over valuing is part of what got us into this mess in the first place. I have heard stories of buyers and sellers agreeing on a price and appraisers coming back with valuations that up to 25% less than the agreed upon price. This seems to be more than coincidental. Don’t we as the consumers who have to pay for these appraisals have any recourse when we feel the job has been very poorly done?
” The appraiser might be from somewhere like Long Island and not informed about values in your neighborhood. That happened to a friend of mine. ”
What if the appraiser lives in Long Island, but grew up or used to live in Brooklyn?
What if the appraiser lives in Long Island , and appraises 5 houses a week in Brooklyn?
Does your friends argument hold up?
The argument about where the appraiser lives is ususally spun by realtors or people who didn’t get the value they needed to get the deal done.
The appraiser might be from somewhere like Long Island and not informed about values in your neighborhood. That happened to a friend of mine.
usually the report has “comparable” with their actual price. So you can look at the comparable and try to see what was missed between yours and their houses.
The resaon for that is a combination of multiple reasons.
1. That is what brought the mortgage mess by overstating so appraisers don’t wantto “do the time” for that.
2. Since this mess, the banks will directly give out the order for appraisal and not the mortgage broker. Because of that the appraiser does not really care whether you close or not as they deal with the bank directly.
3. Since they are dealing with the bank directly they go through a more rigorous review originally and they want to keep their business. Simple supply and demand psychology.
we just received a refi from citibank came in right on the money, our purchase price a year ago was $575k, we put in about $100k in renovations, valuation was $700k.
the fact that we are refinancing for only $480k might take some pressure off the valuer.
problem is a lot of people who bought during peak are trying to refi and are finding out the real value the hard way?
I just had my place appraised for a refi, and the number was actually about 10% higher than what I was hoping for. And, the number I was hoping for was about 5% higher than what I think my place is really worth.
I could not agree more. I recently got my apartment appraised in order to re-finance, and was horrified at the result.
I bought my Park Slope apartment in 2005. At that time, it was appraised at $585K. When I got it appraised this summer, it was valued at $385K – some $200K lower than 5 years previously, despite the fact that I have renovated the basement, created a garden from an unkempt jungle, added a deck, and a new half-bathroom.
I am in the process of challenging this appraisal which seems almost criminally low. The appraiser was aware I was attempting to refinance, so I wonder what instructions he had received from the bank.