Appraisal Problems

In a recent meeting I have been in with experienced agents, we all had similar stories relating to the appraisals that are coming in on our listings. It is not unusual for prices to be off $40,000 of $60,000. Many appraisers are only looking at distress properties and using the lowest form of closed escrow prices to make comparisons. I had this on one of my listings. We had multiple offers and within two weeks sold it at asking price. The appraisal came in almost $40,000 low. The Yorba Linda home sold at $539,000 and the appraisal came in at $498,000. That is the price of some condos in our area. They used a majority of short sale prices. They used one active listing to verify their findings and it was an active listing that was scheduled to go to auction and had been listed low to begin with. Incredible.

To keep the sale together both buyer and seller had to make concessions. It is not fair to either party when the lenders are purposely trying to keep prices low. In a lot of multiple offers you are finding some agents coming in with really high prices in order to get it accepted only to adjust later on because the appraisal is low. That's the monthly analysis of what is happening right now. Of course, next month they could do something to change all this. There are enough people making complaints so perhaps adjustments will be done. This is not only happening in our area, but in other parts of the country. Anytime you put the government in charge, it usually doesn't work and this is another example of how their good politically inspired intentions create more problems.