Deal or NO Deal…unqualified appraisers hold the key

Real estate brokers work harder today to negotiate a sale.  As contingencies are released and the closing date gets closer, the last item and one of utmost importance is the Appraisal.

Whether the buyer is paying cash or getting a loan, the appraisal we assume are  based on comparable sales data.

As broker’s we walk our clients through the maze of contingencies as each transaction unfolds ranging from pest inspections, radon, home owner association status and more.

All this work can be for not if an appraisal comes in below the  agreed to selling price.

This recently happened when an out of the area appraiser was contracted by a lender to appraise. The appraiser came in below the selling price and the sale was going sideways.

After reviewing the appraisal it was apparent the appraiser was not familiar with our resort community.

His property comparables and analysis were all inaccurate. One example of his lack of knowledge was giving a $50K  higher value to a property located in a higher less desirable location and commenting the increase was due to the access this property enjoyed to the  golf courses and private beaches. Little did the appraiser know all properties within Incline Village has access to two golf courses , two private beaches, tennis facilities and much more!

A second comparable was truley based on apples to oranges when he compared the sale of a condominium built in 1971, smaller sq footage and not garage to the appraised town home with an attached 2 car garage and built in 1995 and approximately 3 blocks from the condo referenced. 

Appraisers not familiar with an area should not be allowed to submit their opinion of value unless they have valid knowledge of the community and how property is values.

In our case a letter was submitted and the bank hired a local appraiser who arrived at the selling price.

To many sales are being squashed by this practice. It is critical for brokers to protect their clients and lenders to utilize local appraiser.

My advise, work with experienced brokers/agents who will work with you and understand what needs to happen to  close the sale….Deal or No Deal!

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