3 ms·

Now we just need an explanation of how the hell appraisers come up with their numbers. Not only is it functionally useless to ask someone to measure fair marke

Now we just need an explanation of how the hell appraisers come up with their numbers. Not only is it functionally useless to ask someone to measure fair market value of an asset that already has someone offering to buy it at a specific price, the appraisals seem to come in ridiculously close to offer price every time. I've had to deal with around 8 appraisals over the years as buyer or seller, I only had one that didn't come bad within 1% of the sale price. Either markets are impressively efficient and we don't need appraisals, or the appraiser already knows exactly what number to put on it and goes through the motions of finding a few hundred dollars worth of random plumbing and electrical nitpicks and moves on.

jandrese 3y ago
When I was looking to sell my previous house the market was in turmoil and I didn't have a good idea of what the price should be so I called an appraisal company to ask what they would appraise it for and they refused. Their job is to basically rubber stamp whatever the realtor gives them to appease the bank. At the most they'll check a couple of comps in the area to make sure it's not totally out of whack.
zdragnar 3y ago
The job of the appraiser is to demonstrate to the bank signing a mortgage that the deal isn't a scam. If a house would reasonably be sold for $250k, but the buyer is buying at $2 million, there's probably some very good questions that need to be asked about where the money is going. On the other hand, if an appraiser can demonstrate that: - properties with similar features have been sold in a similar price range in somewhat recent time frame - if no close match exists, then identifying the price differential from past sales might justify a good guess Generally speaking, if someone is making an offer, then they are participating in the market and setting the fair market value of the home. IME yes, appraisers DO know the offer that is being made, and they'll come up with a similar number if they don't have reason to believe that the buyer and seller are doing something shady.
- lazide 3y ago
  The last deal I did, the appraiser asked me (the buyer) if I was okay with the appraisal, or wanted a different number.
  - FireBeyond 3y ago
    Getting out of PMI, the appraiser asked “what number do you need to get to?”
Johnny555 3y ago
the appraisals seem to come in ridiculously close to offer price every time. Few people make wild offers unrelated to the market price and even if they do, sellers rarely accept them. So it makes sense that the appraisal usually comes close to the offer price since both the buyer and seller usually do at least some research of looking around at comparable sales. Though I saved $25K on a house once when the appraisal came in $25K under my offer price. I told the sellers that the bank wouldn't give me a loan at the current terms over the appraised price and I didn't have another $25K in cash to put down on the house, so I'd have to withdraw the offer. The seller made an appraisal appeal that went no where, so they reduced the selling price by $25K.
- derekp7 3y ago
  I had similar, however that was 6 years ago or so when the market was just starting to heat up. The appraisal looked at previous sales, but there was such low inventory that there weren't many comps to compare to, and none of them recent. The seller wouldn't come down much, so in order to make up the difference I had to cut into my down payment (which means instead of 20% down it was only 11% down, as only the appraised value counted toward my LTV and I got stuck with PMI for a few years).
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jandrese 3y ago

When I was looking to sell my previous house the market was in turmoil and I didn't have a good idea of what the price should be so I called an appraisal company to ask what they would appraise it for and they refused. Their job is to basically rubber stamp whatever the realtor gives them to appease the bank. At the most they'll check a couple of comps in the area to make sure it's not totally out of whack.

zdragnar 3y ago

The job of the appraiser is to demonstrate to the bank signing a mortgage that the deal isn't a scam. If a house would reasonably be sold for $250k, but the buyer is buying at $2 million, there's probably some very good questions that need to be asked about where the money is going. On the other hand, if an appraiser can demonstrate that: - properties with similar features have been sold in a similar price range in somewhat recent time frame - if no close match exists, then identifying the price differential from past sales might justify a good guess Generally speaking, if someone is making an offer, then they are participating in the market and setting the fair market value of the home. IME yes, appraisers DO know the offer that is being made, and they'll come up with a similar number if they don't have reason to believe that the buyer and seller are doing something shady.

lazide 3y ago
The last deal I did, the appraiser asked me (the buyer) if I was okay with the appraisal, or wanted a different number.
- FireBeyond 3y ago
  Getting out of PMI, the appraiser asked “what number do you need to get to?”

Johnny555 3y ago

the appraisals seem to come in ridiculously close to offer price every time. Few people make wild offers unrelated to the market price and even if they do, sellers rarely accept them. So it makes sense that the appraisal usually comes close to the offer price since both the buyer and seller usually do at least some research of looking around at comparable sales. Though I saved $25K on a house once when the appraisal came in $25K under my offer price. I told the sellers that the bank wouldn't give me a loan at the current terms over the appraised price and I didn't have another $25K in cash to put down on the house, so I'd have to withdraw the offer. The seller made an appraisal appeal that went no where, so they reduced the selling price by $25K.

derekp7 3y ago
I had similar, however that was 6 years ago or so when the market was just starting to heat up. The appraisal looked at previous sales, but there was such low inventory that there weren't many comps to compare to, and none of them recent. The seller wouldn't come down much, so in order to make up the difference I had to cut into my down payment (which means instead of 20% down it was only 11% down, as only the appraised value counted toward my LTV and I got stuck with PMI for a few years).

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