The Most Powerful Person In Real Estate
There's a little unspoken rule in real estate that always comes up. It doesn't matter whether buyers are beating up each other for a home at a certain price, or what your tax accessor says or even what's plausible... all that matters is what the appraiser things. The Real Estate Appraiser has become the most powerful person in real estate and it's the exact opposite of what was intended.
How did this happen?
If you remember appraisers were one of the original scape goats of the "fall." Supposedly they appraised homes too high and worked with other members of the empire to cause the public to over pay for homes. So the powers that be thought a good idea would be to separate the people ordering the appraisals from the appraisers and put a middle man (appraisal management companies) in the transaction. That moved, also moved the accountability outside the realm of the transaction as well. Basically appraisers like Alan Powers can get something factually wrong on his appraisal and have absolutely zero motivation to correct it.
What Can We Do?
The Jarvis Team picks our loan officers on their overall quality and accountability. This means if there's a bad appraisal (like the one that was done by Alan Powers) that could kill a transaction and ultimately cost all parties (in this case in excess of $15,000). So whether the appraisers like Mr. Powers are spineless or incompetent it doesn't actually matter. It doesn't matter if the general public and every other appraiser would disagree, whether the entire state is appreciating or whether your home has a basement finished or not, it only matters what one appraiser says (factual or not), and "says" first ... that is if you don't have a lender that can hold the appraisal management company accountable and thereby hold the appraiser accountable.
So your lender matters more then just rates but in many other things as well.
If your home is listed and your really concerned about your home value then you might consider getting an appraisal upfront. Appraisers use the same basic procedures each time and although they can be very subjective. It could be useful in persuading any new values.
So while we deal with many issues in real estate, nothing right now is more ominous then the potential of getting a bad appraisal making the appraiser the most powerful person in real estate.
Post Author: Joshua Jarvis
Joshua Jarvis is the owner and founder of Jarvis Team Realty. Joshua is a follower of Jesus, husband and father. Joshua loves technology and helping connect others. An Atlanta native and a graduate of Georgia Tech, Joshua is often called a "homer" because he's all about local Atlanta teams and loves the diversity that is the calling card of the "ATL."