In early June, I kicked off a two-part article on how the home appraisal landscape has changed across the country in the recent past. The first piece of the article (see How Home Appraisals Have Changed – Part I), went over two characteristics, and I’ll be wrapping up the piece today in an effort to outline the 5 Ways Home Appraisals Have Changed.
Let’s continue the thread with the following…
3) What’s bad for the seller is good for the buyer
A big part of the problem that caused the housing bubble was appraisals coming in extremely high, well over market value. Now it seems just the opposite, due to a declining market mixed with short sales and foreclosures, traditional home sellers are taking a huge hit. For instance, I had an appraiser tell one of my clients the upgrades (over $25K) they did added very little value to their home. No home seller wants to hear that the house they feel is worth $300,000 is actually only worth $219,000 now and no home buyer would want to pay an inflated price. So if you’re a home buyer, hang in there with the time and price, in the end it will be worth it.
4) Know the comps if you’re a seller
As a seller you should take a proactive approach in the appraisal process, and be prepared ahead of time to answer any questions the appraiser might have. A good recommendation is to have listings of what homes sold in the past 3-6 months in your neighborhood and documentation of any repairs or upgrades made while you owned the home. Anytime you can make the appraiser’s job easier, you’re both helping them, and yourself.
5) Appraisal Rules will smooth out naturally
I know the current situation might not look promising, but like all good things it will take some time to fix. Part of the reason the larger US economy took such a huge hit was due to the real estate debacle. We need regulations so this will not happen again. On July 28, 2009 the Federal Fair Housing Agency, Fannie Mae and Freddie Mac issued an alert to all lenders clarifying two points that had made a lot of people in the industry upset.They said that appraisers should have clear experience in the geographic area. If they don’t, they should be reported to state appraiser licensing agencies. This is a great step to ensure one of the most valued assets one owns is protected by recognizing that real estate values are hyper local.
This article was contributed by Ryan Nager, a specialist in Mesa Real Estate in the Phoenix Metro Area.
Keith Munsell 
