This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Problems Persist, But Appraisals Are Improving

While low home values continue to be an obstacle in the way of a full housing recovery, more and more markets in recent months have experienced home-price improvements. Although home prices are up in some areas, many real estate agents, homeowners and homebuyers alike are frustrated that appraisals aren't keeping pace with current home-price appreciation.

Past prices don't always capture the momentum shift in a rebounding community, says Peter Grabel, a senior loan officer at Luxury Mortgage in Stamford, Conn. "Appraisals look backward in time, whereas the market looks forward in time."

According to a recent survey from the National Association of Realtors, 34 percent of Realtors reported having had a problem with an appraisal within the last three months. In addition to not keeping pace with current price improvements, Realtors also noted foreclosures being used as "comps" (information on recently sold comparable homes), out-of-town appraisers and slow turn-around times as being ongoing issues with today's appraisals.

Add in the fact that buyers and refinancers often pay around 400 dollars per appraisal and these issues are particularly frustrating, Grabel says.

Don't blame the messenger

Richard Borges, president-elect of the Chicago-based Appraisal Institute, says that many people find fault with the appraiser if an assessment comes back lower than the price the seller and buyer negotiated, but skilled appraisers take a lot into consideration when evaluating a home in order to determine the market price.

Read: Ho w to challenge that low appraisal

"Appraisers look at the condition of a property, the competition a property has and the buyer for that type of property in that area," says Borges. "They are there to provide that unbiased, impartial, independent, objective knowledge about the market and the particular characteristics of the property."

This means appraisers should not assess a dollar amount solely to make sure a real estate deal goes through, he says.

Appraisal management companies

Another major source of appraisal frustration within the real estate community has been the increased use of appraisal management companies (AMCs), says Grabel. Due to recent regulations, lenders and appraisers are not allowed to influence each other, he explains. AMCs have stepped in to fill the void, and now lenders who need an appraisal contact an AMC, which then assigns an appraiser for the property.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $93.24 0.00%
FB $117.81 0.00%
GOOG $701.43 0.00%
TSLA $211.53 0.00%
YHOO $36.94 0.00%


Chart of I:DJI
DOW 17,660.71 +9.45 0.05%
S&P 500 2,050.63 -0.49 -0.02%
NASDAQ 4,717.0940 -8.5450 -0.18%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs