According to a recent article in the Washington Post, appraisers are hindering a full recovery in the real estate market.
After reading the article, I believe that low quality appraisals are causing an influence, but we can’t accept all the blame. The article states that a recent poll to NAR members stated 33% of sales fell through due to problems with the appraisal. Sounds like BS to me, sounds more like selling agents trying to get the most $$$ for their clients in a heating up market. That doesn’t mean a buy should over pay for a property. Do we really want to go down that road again?
The article goes on to explain how many appraisers are afraid to make adjustments for appreciation due to the appraisal management companies. So to save some time and avoid backing up their data, I can see many underpaid appraisers just opting out and stating no appreciation for the area.
I can also see why AMCs are afraid of adjusting for appreciation. Most lenders don’t want to see this again after the big melt down.
The final value has to be supported by an ‘unadjusted’ sale as well, so I do not see how appraisers are getting blamed for this issue as well. If sales are showing appreciation, then ALL the sales should be showing appreciation, it is fairly easy to determine if an adjustment is required.
AMCs are controlling many aspects of the appraisal process which is hindering a full recovery of the Real Estate Market. The direct lenders who have their own ‘amc division’ and are forward thinking understand the value of a qualified appraiser and not only hire better appraisers but get better quality appraisals that reflect current market conditions.
Just my 2 cents.