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If appraisals are not accurate, then what is the definition of 'accurate'? Appraisals are what the lender relies upon to verify the mortgage amount. I also hi

by EpicEng 10y ago

If appraisals are not accurate, then what is the definition of 'accurate'? Appraisals are what the lender relies upon to verify the mortgage amount. I also highly doubt that number.

Neliquat 10y ago
Sales price is really the only 'accurate' statement of value.
- byoung2 10y ago
  In a way, that's true and false. A house may be worth $500k, and you might get a dozen people to offer $500k, but if someone comes along and wants to buy back her childhood home for $1 million for the sentimental value, isn't the house still only worth $500k? The next buyer will still think the house is only worth $500k.
  - EpicEng 10y ago
    I suppose that's kind of my point (not the parent.) 'value' is an amorphous term. Ultimately, you have comps, a detailed appraisal, and emotion to guide the purchase. There is no hard number, but the first two get you very close.
ensignavenger 10y ago
The article uses the actual sales price as the "accurate" number. As with anything, the 'value' is what a willing and able seller and a willing a able buyer agrees to. An appraiser attempts to determine the most likely price for something (in this case a home) within reasonable amount of marketing time. The appraisal report will usually specify the expected marketing time. I think in most areas this will be 3-6 months, some areas longer and others shorter, depending on the market. Of course, appraisals effect prices, because most buyers need to finance, and most financiers won't do it without an appraisal that is at least as much as the purchase amount. (That is the "able" part of the willing and able requirement). Two appraisals performed on the same property at the same time can come back with very different numbers. I have bought two houses in the last 4 years- both had 2 appraisals done, and one the values were almost almost 17% different- a difference greater than most of the "errors" that the articles notes for Zestimate vs sale price. On the other house, the appraisals were came back with nearly identical values, but the first appraisal was done wrong. Still this value (the appraised value from both appraisals) was 16.2% higher than what I paid for the property. My experiences are just as anecdotal as the articles, though. But I have spoken with real estate professionals all over the country that have the same experiences repeatedly with appraisals.

by EpicEng 10y ago

If appraisals are not accurate, then what is the definition of 'accurate'? Appraisals are what the lender relies upon to verify the mortgage amount. I also highly doubt that number.

Neliquat 10y ago

Sales price is really the only 'accurate' statement of value.

byoung2 10y ago
In a way, that's true and false. A house may be worth $500k, and you might get a dozen people to offer $500k, but if someone comes along and wants to buy back her childhood home for $1 million for the sentimental value, isn't the house still only worth $500k? The next buyer will still think the house is only worth $500k.
- EpicEng 10y ago
  I suppose that's kind of my point (not the parent.) 'value' is an amorphous term. Ultimately, you have comps, a detailed appraisal, and emotion to guide the purchase. There is no hard number, but the first two get you very close.

ensignavenger 10y ago

The article uses the actual sales price as the "accurate" number. As with anything, the 'value' is what a willing and able seller and a willing a able buyer agrees to. An appraiser attempts to determine the most likely price for something (in this case a home) within reasonable amount of marketing time. The appraisal report will usually specify the expected marketing time. I think in most areas this will be 3-6 months, some areas longer and others shorter, depending on the market. Of course, appraisals effect prices, because most buyers need to finance, and most financiers won't do it without an appraisal that is at least as much as the purchase amount. (That is the "able" part of the willing and able requirement). Two appraisals performed on the same property at the same time can come back with very different numbers. I have bought two houses in the last 4 years- both had 2 appraisals done, and one the values were almost almost 17% different- a difference greater than most of the "errors" that the articles notes for Zestimate vs sale price. On the other house, the appraisals were came back with nearly identical values, but the first appraisal was done wrong. Still this value (the appraised value from both appraisals) was 16.2% higher than what I paid for the property. My experiences are just as anecdotal as the articles, though. But I have spoken with real estate professionals all over the country that have the same experiences repeatedly with appraisals.