Posted by Linda Simms on July 20, 2003 at 09:51:14:
Drew is right. However it is not due to unscrupulous appraisers. An appraiser has a lot of leaway in how he makes an appraisal. The comps and the plus’s and minus’s he uses, will go a long way in detemining how his appraisal comes out. In general, properties tend to appaise at or slightly above the contract price when buying or selling, unless the the price is way out of whack! The same holds true on refinancing,if the mortgage company who picks the appraiser has a vested interest in a low appraisal. Picking the right appraiser, if you get to pick, can influence how you may want the result to turn out. Providing him ligitiment comps, if he deems them professionally acceptable, will also help. Contrary to popular and most appraiser’s beliefs, it is not an exact science.
I have found that when it comes to buying a home, appraisers will always appraise the property for at least the amount you are paying for it…no matter how high the price is…however, when it comes to refinancing, appraisers tend to “lowball” the appraisal…several thousand dollars below what it should be.
How can I get the appraisal I want? How can I argue or arbitrate an appraisal?
Drew,
You have to understand that there is a lot more involved in an appraisal than most people think. As an appraiser I find that most people have an unreasonable expectation about the value of their property. This happens because we have emotional involvment in our own properties. An appraisers job is to come in and to give an educated third party opinion of what the fair market value coud be. Not what it absolutely will be, but what it probably would be. Hence when people come together and structure a deal, it is usually easier to come up with supporting data for the value than it is when a person arbitrarily chooses a value for their own property when doing a refi. I personally have had to do several appraisals recently where the purchase price was higher than any supporting data, and I had no choice but to turn it back to the broker. so it does happen, just not as often. If you do happen to feel that you have been defrauded though, check with your state real estate department, which in almost every state has a seperate agency dedicated to the licensing and regulating of appraisers. Your complaints can and should be directed to them in the case of fraud, or other misdeeds. Good Luck, and Happy Investing!