Appraisals In The Time of COVID-19
In these COVID times, appraisals are the hurdle to closing transactions. (BTW, have you noticed that COVID is the excuse for EVERYTHING? Some appraisers provided awful service before, but now they have an excuse.) Appraisals are to protect the buyer from purchasing an overvalued home and all appraisers are managed by appraisal management companies.
Houses are scarce, and some agents are forced to offer over sales price to secure a home for their client.
Our office was skipping along with appraisals coming in just fine until the past couple of weeks. FYI: If an appraisal comes in low, the agents can dispute the value. There is a process to follow for consideration of a challenge.
We had a situation where our first-time home buyer’s appraisal came in $22,000 low on a $292,000 contract. The listing agent was M.I.A and left it up to the buyer’s agent, Shawn, to challenge the appraisal. Shawn compiled an awesome dispute. He read through the appraisal, itemized the discrepancies, and provided a solid comp the appraiser overlooked. Although our office did remove some of the inappropriate words (there is no such thing as a stupid appraiser), we sent the comp and the detailed letter to appraisal management. In 48 hours, the appraiser had updated his appraisal. New valuation: $288,000. The buyer and seller split the difference and we closed last Wednesday.
Another low appraisal was on a condo. This time the listing agent whined like a baby and scribbled all over the appraisal (pretty sure he used Crayolas) instead of sending a letter or comps. He demanded that his property was the very best in the complex because it was not located near the main street and deserved a higher amount. Challenge denied.
My favorite recent appraisal issue was Savvy Investor (How do we know he is savvy? Because he loooved to brag about all of his shrewd business deals!) who made a full price offer, convinced it would come in much less. Except, the appraisal came in at list price. Savvy Investor was livid and wanted us to challenge the appraisal to his lower, imagined value. Seriously, I can’t make this stuff up.
Appraisals are an opinion of the appraiser. And you know what they say about opinions… everyone has one.