Mortgage lenders are not the only ones that have received the blame for the housing bust of the past couple years. Appraisers are lumped into that category - and for good reason.
A few years ago, everyone was getting loans. But appraisers were also appraising houses for more than they were probably really worth. And now, because of the spotlight upon them, they're being extremely stingy with the appraisal amounts they're giving.
I just had a home in contract with a purchase price of $65,000. It was a GREAT deal for my client. The other homes in the neighborhood and surrounding areas are listed for between $95,000 and $140,000. The recent comparable sales show most sales falling around $107,000+.
But guess what. The appraisal came back too low. And when an appraisal comes in low, it means the buyer can finance less of the price of the house, and therefore, the buyer needs to pay more down payment. It's a deal killer. And especially in this situation, it's completely uncalled for. The appraised value should have been much higher than the purchase price. So now, I'm scrambling to try to hold this deal together by pulling paperwork and comparables, presenting it to whoever will listen to me. We'll see what happens, but it looks like the appraisal has killed my deal for now.
Dan Hamilton
Keller Williams Greater Columbus Realty
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