Very little appears to have changed with appraisers over the last several months when it comes to the value they establish on a home that's up for sale or refinance. Many of them feel pressured by someone involved in the transaction to come up with the right price, or hit the number, usually meaning it should be inflated to satisfy their needs, says the Appraisal Institute. It could be a mortgage originator doing it, a real estate agent or even the nice lady whose flower beds are immaculate. Or another source. Anyone who could benefit from a higher valuation.
Inflated appraisals are one reason to the current housing and mortgage turmoil currently sweeping the land. As a result of that discovery, Washington recently established new regulations to combat bribes, interference and intimidation in the business, but obviously its impact so far has been less than desired. The pressure is still there, although, as some say, it has assumed a softer tone.
It's a tough environment to work in now anyway as home prices have dropped quite a bit in this city, like Las Vegas, and maybe a little less in that town, like Mesquite, Nevada. Whether values are stabilizing or not is hard to figure out in this volatile landscape. There can even be clear differences between adjoining neighborhoods within a city when recent comps are looked at. It's hard on the appraisers.
Everybody involved in a purchase would like the appraisal to arrive at the contract price and then there would be a relatively quick close. But today lenders are often challenging the figures they see and refuse to approve loans. They were burned badly when the famous bubble burst and are now extra cautious. So, frequently, hitting the number doesn't work. Sellers in these cases, of course, fume. Buyers, on the other hand, probably wouldn't mind grabbing homes at discounted pricing like this. And mortgage providers and real estate agents would succumb into rolling their eyes sensing promising deals about to fall through.