Are Appraisals Finally Playing Catch-Up?
Many real estate professionals have been blaming low appraisals for derailing transactions over the last few years. But now 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 isn’t getting any easier. One of the big reasons, they say, is because of low inventories in many markets. “An undersupply of available homes has prompted bidding wars above list price, a price that isn’t necessarily justified by an appraisal,” The Chicago Tribune reports.
“That’s been happening a lot this winter and spring — the appraisal isn’t coming in,” Alvin “Chip” Wagner, of A.L. Wagner Appraisal Group Inc. told The Chicago Tribune. “It’s an appreciating market, and the closed data that appraisers use is behind what the homes are actually selling for right now. We’re just now on the cusp of good data.”
Appraisers say they are using sound data to base their valuations, including motivations of buyers and sellers.
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.”