Are realty foreclosures being made worse by “low appraisals that are botching deals and stifling a housing recovery”? (quoted from an article by Michelle J McFee)
Michelle goes on to say: “Appraisers are being blamed for the slow recovery in the housing market”
Once just another step in the sale process, appraisals are attracting ire from real estate agents, builders, homeowners, buyers and sellers. A major trade group says low appraisals are botching deals and stifling a housing recovery. Real estate agents say appraisers are being sent from miles away to evaluate homes in unfamiliar neighborhoods, resulting in flawed appraisals and sidelined sale.
Appraisers under fire:
“Appraisers were blamed for the run-up of the market when prices were high, and now they’re being blamed because prices are low,” said Ken Chitester, a spokesman for the Appraisal Institute. “Both can’t be true. Appraisers are doing the same thorough research and thoughtful analysis that they’ve always conducted. So, in short, don’t shoot the messenger.”
When home prices were rising, appraisers contributed to inflated values. Local appraisers say they received calls and faxes from mortgage brokers seeking the highest appraisal — and offering jobs contingent on appraisers’ hitting a specific number. (Read more here).
Bank’s response to local laws:
Some states have enacted laws to protect appraisers, but banks have responded to these moves by hiring their own appraisers.
As mentioned before, some of these come from as far away as 100 miles from the property in order to get the appraisal on a property that favors the bank. Of course the appraiser from out of town does not know the market as well as a local specialist and so the price may not be as accurate as a local’s estimate would be.
Thus the accusations from the Real Estate Agents. They may have grounds to complain. But there is one thing we can be certain of, all of this is contributing to the state of the housing market and provoking more realty foreclosures. This is where you as an investor can help.
Sign up for our free 7 part course on Foreclosures right here. You will receive some free tips on how you can make a difference in the lives of those affected by this realty foreclosure dilemma, as well as in your own life.
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Michelle Jarboe McFee The Plain Dealer
This post contains reprints from Michelle’s article In rough real estate market, appraisers feel heat for home sales that fall apart or lag behind
Photo thanks to Pick a rent