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Ken R Fisher & Associates, Inc.

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Appraisals

Appraisers have a dilemma.  If they appraise too many properties too low to meet the desires of the mortgage provider, they won’t be hired anymore.  If they appraise too high, who cares … the appraisal figure seldom ever exceeds the Purchase Price of the property (they often require that the purchase price is disclosed to them prior to making the appraisal).  Many appraisers are always in training requiring a superior to sign off on their work.  Which appraiser did you get?  Did you ask for the name and qualifications of the individual?  Guess who is paying for the appraisal … the very same person who has the absolute right to know the qualifications of the individual doing the appraisal.  You also have a right to demand a copy of that appraisal.  When buying new construction, forget asking the name of the appraiser working for the mortgage company working for the builder … that property will appraise … period.  In August, 2004, HUD implemented a new regulation making the appraiser subject to the mortgage company’s responsibility ... it was never enforced.  Finally, the pendulum is swinging toward the consumer, at least a little.  You need to add an honest, experienced real estate agent to the mix.

Watch out for the Appraisal JUNK FEE!  Typical full appraisals cost between $300 and $375 for a first mortgage loan.  More and more appraisals are not FULL APPRAISALS.  Exterior only appraisals and Drive by or Windshield appraisals cost considerably less … some mortgage companies will charge the full price and pay the appraiser between $50 and $100 for the task.

The biggest problem we have now is that mortgage providers are using Low Bidder Appraisal companies from other areas to appraise properties in your neighborhood.  These folks are unqualified in the writer's opinion and will always appraise low thereby killing your deal or requiring the buyer to make up the difference between purchase price and appraisal price with cash that most don't have.  They will often include foreclosures in valuations thereby making YOU pay for a neighbor's misfortune ... and the all-knowing and soon to be all-controlling FEDERAL government is mute regarding the problem.  AND, if you complain about the low appraisal, the mortgage providers will ask the failure appraiser's boss to 'review' his work ... Whoopee!  Little good that will do ...

The Seller's Agent should remove the lockbox from the property immediately upon sale and then MEET the appraiser at the property and GIVE him or her the actual true comps for the property.  It should help.

An honest, experienced real estate agent can quite often assist you in determining the true value of your purchase, in most cases presenting you with those same comps.

Appraising property is not rocket science!