Many government “fixes” have occurred within the appraisal system which for most people involved makes it a maddeningly frustrating process. The Dodd Frank law signified simply a knee-jerk reaction to all the bank and real estate shenanigans that occurred. No doubt, the appraisal process will “evolve” over the next few years in a proactive, not reactive manner.
Much of the overall appraisal problem stems from desperate for work, out of area appraisers being hired by 3rd parties to appraise homes in far away areas. Doughty mentioned that most appraisers in his group come from less than 15 miles away to appraise a home. That may be true however we recently dealt with an appraiser who came from Modesto to appraise in Morgan Hill. How reliable is that appraisal?
Many of the problems that both buyers and seller face stem from valuation. Not happy with your appraisal? For Wells Fargo, Doughty mentioned that an appraisal can have two attempts for reconsideration (use a reconsideration form) but do not mention the V word (value).
Buyers and sellers can offer repair info to discuss with an appraiser if they think that it will affect the value. Things to discuss include:
1-Dates of the repair
2-Type of Improvement
For short sales, we have seen dealt with crazy out of whack valuations. Doughty said that his appraisers look for current market value and use REOs before Short Sales. We get that but when an appraiser or BPO agent skews a value by eliminating all distressed properties then they simply have a misguided value.
Doughty said that the threshold for including short sales and REOs to consider value hovers around 30-35% for an area. We’ve seen Wells toss out short sales and REOs with more than a 50% saturation rate in an area.