Problems Persist, But Appraisals Are Improving
There have been complaints that AMCs pocket a large portion of the appraisal fee, choose inexperienced appraisers who are willing to work for less money or who are from out-of-town and aren't familiar with the neighborhood, Grabel says. All these ultimately affect their valuations.
Borges counters by saying that AMCs have been around a long time, and there is an important place for them in the industry, but trade organizations -- like the Appraisal Institute -- do try work against any situation that encourages the use of inexperienced appraisers.
Appraisals have improved
Despite some setbacks, things aren't as bad as they were a year or two ago.
According to Grabel, for neighborhoods with increased real estate activity, it's easier to find recent sales prices for comparable homes, so the agreed upon price between buyer and seller is more likely to be in alignment with the appraised value.Read: Lenders and appraisers are catching up with green homes "In the more condensed areas where there are lots of sales, I am typically more confident of getting a good valuation," he says. Diane Saatchi is a senior vice president at Saunders Associates, a real estate firm in Bridgehampton, N.Y. She says that sales activity is picking up, and that can only make it easier to find more accurate appraisals in the future. "Within the last six months or so, the appraisals haven't hurt deals," Saatchi says. "We have a lot of people who have been waiting for the market to come up from its bottom before they start buying. I think the perception now is it is OK to buy." Appraisals have always been an important part of the real estate process. As home sales continue to increase, more comps will become available. Agents are confident this will help the value of appraisals get more in line with current prices which can then improve the real estate market for everyone involved.
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