Appraisals are a strange bird right now. Lenders cannot even talk to (let along choose) the appraiser. The appraisal request goes into a pool and too often they are choosing the lowest bidder. In any field, what are typically the characteristics of the lowest bidder? Experience? Reputation? Established? Fulltime? Not typically.
We have buyers under contract right now; house has a 4-year-old pool that cost $40k to put in. The first appraiser did an in-person review and gave the pool at $20k value. The second appraiser (yes, a 2nd) did a drive-by (that does not equal going into the property) and gave the pool a $10k value. That’s a problem because now they are saying the house is over-priced by $10k.
Keep in mind that when we make and negotiate an offer with a seller, we are using recent sold comp data to justify our price and do our best to make sure our buyers are not paying over market (hopefully under) … but we work very hard to arrive at the offering table with reason and logic. We always ask ourselves the question: Will this house appraise?
Realtors are removing the lockbox from the house once it is under contract so that anyone who wants to get into the house (like the appraiser) has to have an appointment with the Realtor. It forces a face-to-face meeting and an opportunity for the Realtor to tell the appraiser about the house and the neighborhood. I have heard stories of appraisers who do not live in Austin appraising Austin homes. So you tell me, do you know the value and market difference of a home in Hyde Park (say around 46th Street) and how that may compare to 54th Street? Or how Crestview compares to Wooten or to St. Johns? Big difference.
We are going to be dealing with this for a while. It is a bit of an over-correction.
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