Why so much pressure on appraisers to lower values?

Editor,

I sent the email below to Jerome Nagy, legislative contact at NAR. It is in regards to HR 1728 (http://www.govtrack.us/congress/bill.xpd?bill=h111-1728). I hope you will publish it because I am especially curious how many other Realtors out there feel the same as I do:

Hello Mr. Nagy,

I am writing to you today about the dire need for the passage of HR 1728. I have seen the impact that the current pressure on appraisers to undervalue properties is having on today’s sellers and buyers. I have a buyer who was perfectly willing to, and saw the value of, purchasing a home listed at $279,000 for $259,000. The seller thought it was reasonable too, and they came to terms. The appraisal came back at $239,000 – where a value of $259,000 could easily be justified. My buyer could not proceed with that sale after paying for the appraisal and home inspection.

I have sellers with a very lovely, well-maintained and upgraded home listed for $192,000. It is not bank owned or a short sale. People have been flocking to this listing and we have had an offer. The potential buyer backed out because he’s afraid the house won’t appraise at a sales price of $190,000 with 6 percent in closing assistance to the buyer. It would be possible to reach an appraised value of $190,000 if proper consideration were given to the home in regards to condition, location and upgrades; but unfortunately, many Realtors do not see that proper consideration being given.

Frankly, I do not understand all this pressure to undervalue properties. If properties were valued appropriately and fairly, we may even be able come out of this whole mess a little sooner. Some values would come up, which would assist in raising the values of future sales, and, in turn, make a little more money for all those involved.

I spoke to an appraiser today who really loved his job. Right now, though, he can’t stand it because he cannot do his job properly. He cannot add value for upgrades that actually add value or give proper credit for the location of a property. That is just wrong. If someone has done a job for a number of years – a job that he loves – and he can no longer find any joy in it because of the pressure he feels to undervalue properties, there is definitely something wrong.

The sooner HR 1728 gets passed and IMPLEMENTED the better.

Honestly, I don’t think appraisers should get to see the sales contract. It has nothing to do with the value of the house and should have no bearing on the appraiser. That’s what sold, pending and active listings are for, as well as public records.

Thank you for your time and your ear.

Lisa Jones
Avalar Real Estate Services
Clermont