information so that you understand the market. An appraiser, who should be licensed by the state, performs the realty appraisal. It is best to hire someone local with years of full-time experience in order to get a more accurate realty appraisal. But first, how to find one if your relationship circle is not large. The best way is to refer to a real estate appraisal website to look for and compare services you can have. The appraiser and realty appraisal are governed by the minimum standards, published periodically in the Uniform Standard of Professional Appraiser Practice by the Appraiser Foundation. The Foundation is chartered by Congress. The recent real estate bubble, unfortunately, brought problems for realty appraisal and many involved in real estate transactions. According to recent surveys in oral and in real estate appraisal websites, appraisers have been routinely asked by lenders to inflate real estate values to keep up with the ever-rising real estate market. One person in realty appraisal in San Diego quit and turned in his license to the state, after being fired three consecutive times for refusing to inflate his valuations. Now, real estate appraisal websites across the United States is under a microscope from federal financial regulators and Congress.
The realty appraiser may be hired by the seller to determine an accurate selling price or by the buyer to ensure the accuracy of the purchase price and mortgage; but generally, the lender does the hiring or uses their own in-house appraiser. Though buyers may assume the lender has their best interest, mortgage lenders have their own best interest at the forefront, especially some not-so-scrupulous lending officers who may be targeting a higher commission. If I were a seller, I would hire my own realty appraisal to ensure I was getting the most for my property. As a buyer, I would put the money out upfront to hire an independent and objective appraiser with no connection to anyone within the real estate transaction. This ensures that I do not contract for a mortgage, based on an inflated valuation by appraisers or real estate appraisal websites, which will give me a new home with a lower or negative equity. The lender still may require a different realty appraisal.
If five different real estate appraisers evaluated the same property within the same timeframe and under the same conditions, it could result in five different and varying property valuations. Why? There is no set checklist or established value for each property feature and amenity. Though real estate appraisal website is based on prescribed standards, it is a subjective process. If there is more than one realty appraiser and they disagree significantly, you have options. If the value is too low for the seller, renovations may raise the value or you can decline to sell. If the lender insists on its appraiser's value, which disagrees with your realty appraisal's value, as the buyer you can look for financing elsewhere or decline to purchase the real estate.
There also is the option to bring the appraisers together to come to a common agreement on the value. Remember, the person looking out for your best interest is yourself. Ensure the appraiser in your real estate transaction is reputable, objective with no connections to anyone in the transaction, local and experienced. |
