Complaints that home appraisers are ignoring home appreciation and coming in too "low" on their assessments have become common. So common that it was the topic of a recent column by nationally syndicated writer Ken Harney. In that piece, those in the real estate business say the issue has led to sunken deals and could hurt the market's recovery.
Late last week, I hung out briefly at the Loews Coronado Bay Resort, where trade group the Appraisal Institute got together for its annual meeting. There, I sat down with the group's vice president, Ken Wilson, to discuss his take on the issues raised in Harney's column.
Question: I'm hearing from Realtors the same thing that was expressed in the Harney article. What's going on?
Answer: In terms of the word "low appraisal," that's a very interesting phrase because what does low appraisal mean? It basically just means that the appraised value came in less than a list price or a contract price, and it's not the goal or the intent of the appraiser to just tattoo a contract price. It's their intent to be an independent third party, to be objective and to present a document that is fully supportable to a client, which in the context that we're talking about now, is a residential lender. They're not interested in making a transaction close, to see that a deal succeeds for a Realtor; They're engaged, or hired, to represent the interest of the lender. They're making a sound business decision in a decision regarding a l
