Hank Miller
In the metro Atlanta Real Estate market like a hound in the pantry…
A Low Appraisal, Now What?
As if there weren’t enough land mines to dodge and punji pits to avoid in the current Atlanta real estate market, we continue to see a steady increase in the number of appraisal issues. Low
appraisals are most common with refinance loans but over the last year appraisal challenges continue to increase on the sales side.
The struggling Atlanta real estate market is similar to the national one; 10 percent of the nation’s Realtors said they had sales canceled because appraisals came in below the price buyers agreed to pay, according to a January survey by the National Association of Realtors. Another 15 percent said contracts were renegotiated after appraisals came in below contract; sellers dropped prices or buyers put up more cash. 33 percent of home builders said they lost sales because of low appraisals, according to an August survey by the National Association of Home Builders. That was up from 26 percent in a 2009 survey. If you’re on the receiving end of a low appraisal, how do you challenge it? That depends…
Challenging low purchase appraisals
If you’re a buyer and the appraisal comes in low…so what? Take that and run; your agent should work that into a reduction in sale price. If you’re a seller, then your agent needs to get real busy, real fast. The best thing to counter low appraisals is to avoid them, listing agents should be well prepared to support the contract price of a home. Before the appraiser gets to the home, the agent should collect the appropriate supporting data, ensure it meets the criteria and leave it for the appraiser.
A competent agent knows that if an issue arises, the best course of action is to keep it all business. Carefully review the report, look for discrepancies and provide legitimate supporting data for your position. I’m going to assume that agents understand what that means, if not then consult your broker.
Challenging low refinance appraisals
This gets a little tricky because most owners don’t have a familiarity with the real estate business. In short, you need to acquaint yourself with how appraisers work. The single most important thing to remember is not to let personal opinions get in the way – stick to the data. You will bang your head against the wall and waste time if you don’t provide legitimate data. CLICK HERE for a thorough outline of things to consider.
This appraisal thing of ours…
I’ve been appraising since ’89, had large companies in two states, reviewed high end appraisals for a major private lender and now complete hundreds of foreclosure appraisals each year. “This thing of ours” is a shrinking business; experienced appraisers leaving due to continued micromanagement, over regulation, reduced fees and increased expenses. The result is an increase in less experienced appraisers stretching areas of coverage and trying to do more with less in less time; and mistakes will occur. I’ve seen appraisers fall 2%-3% short of contract price; that’s nonsensical. I’ve seen appraisers make major errors measuring homes; missing rooms and major features. I’ve seen appraiser’s miss comps and manufacture comps instead of properly researching them….there are poor appraisers to be certain and you might run into one.
Keep your cool, keep it all business and understand the parameters that the appraiser works within. CLICK HERE for a detailed road map, and if you need to lock horns make certain you prepare well.
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Hound Dog is led by Hank Miller of The Hank Miller Team. He is a licensed broker and certified real estate appraiser in the state of GA. Since 1989, real estate has been his full time occupation and Hank consistently ranks at the very top of Atlanta area agents in overall production. He is known as much for his attention to detail as he is for his candor. READ MORE
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I recommend that Realtors, appraisers, & mortgage brokers who are fed up with this BS visit http://www.BankRape.com and contribute to the effort to shut down the national mortgage market.
Change is good…forced change is even better!