beaudroix, I do agree that three appraisers will give you three different values on the same property. However, asking three appraisers to get within 1% on value, is stretching it in today's market. In a market with many sales, it might be more likely, as finding good comps will give a good basis for determining value. In a slow market like we have today, the comps are not there, so appraisers will have to go back in time to a different market, or stretch out to other neighborhoods to try and find a comp. Also, right now, you might have a comp lot sell at $80K, right next to a lot which sold 6 months ago for $110K. That person who bought the lot in 2001 for $20K, can afford to sell it at $80K to make the quick sale. You might also have an auctioned lot sell for $65K, just down the street. Let's also throw in a similar lot which sold one year ago for $165K. Getting three appraisers to come up with values varying by less than 1% would be a challenge. They want to show an accurate value, but with comps all over the board, and wanting to show the highest accurate value, they will have a tough job.
The appraised value is determined by the comps, and different appraisers are likely to use different comps, and therefore establish different values.
Mango, you are correct that getting the seller's realistic in their asking prices is 3/4 of the battle right now. However, a good Realtor doesn't have to get a $500 appraisal to determine value. Realtors can perform CMAs to determine value. The problem is two-fold. 1) Some Realtors are scared of losing the potential listing, so they might try to find more value that is actually there. 2) Sellers don't listen to the professional opinion of Realtors. They just keep dialing until they hear a price they like.
SJ,
I sold a home last week in Cassine for $570,000. The appraisal came in $22,000 shy of asking. It made no sense at all. The comps the appraiser used did not even support my contract. He had very similar sales in the Grove in the $700's he could have used. It was very odd and very confusing. Lets see, the bank does not want to fund it and the appraiser does not want to make a valid appraisal.... Hmmm... Makes you wonder why we keep doing what we do. Luckily, the lady wants the home and paid the difference. She now is the new comp in Cassine. The best thing I have ever heard about appraisals came from an appraiser. "Most appraisals are wrong"!
appraisals also take into account the declining market value and the declining building cost. in '04 just the opposite happened. what appraisers and shelley are trying to tell you is that your house will be worth less next year than this year according to all trends in the market...that's kind of what happens in a wild up tick or down fall. when people can reap more than 100% value increases and more in a year (month/day/hour) or 2 and then continue to increase value based on investulation frenzy there are plenty of win/loose transactions...seller's won big for awhile and now some buyer's are paying the consequences...not much about appraisals make sense on either side of the swing
When was his sale in the Grove? Just curious.
Bobby, I work with appraisers often, and never have a problem with helping them find real comps which would justify a selling price. Just curious if this particular appraiser welcomed the idea of looking at comps you presented?I do not look for my appraisals to predict the future. We are simply asking if the contract in their hand can be supported by similar sales. This appraiser went out of his way to make this sale not work. He had a harder time making it not work then if he would of just used the available comps. Makes you wonder.....
but since banks don't want the properties, and many people cannot come up with the additional cash when they refi the loans, how is that in their best interest? Banks are not allowed to collaborate with the appraisers. The appraisers are just covering their own butts, IMO.