Ridiculous Conservatism on Appraisals ... Realtors Beware

The recent spotlight on the mortgage industry and the practices of appraisers has resulted in some over the top knee jerk reactions that Realtors need to be prepared. Appraisers have been scrutinized and some have faced ridiculous requirements from underwriters and been dictated how they are to prepare their analysis. Fasten your seat belts; we are in for a long and bumpy ride!

An appraiser went out to a home with a gorgeous larger highly treed lot with a creek amenity. Very private setting and truly a premium in the market. The home also had a second story gameroom and bathroom amenity which the appraisal district had not reflected as living area on their tax records. The second story was all original construction, consistent in material finishes, normal stairs leading to the area, ceiling height was consistent with the level of the first level. The appraisal district simply had not properly record this option on the floor plan when the home was built. The homeowner was refinancing the home. When the owner received word from the lender that the home did not appraise the owner inquired about the appraisal report and got a copy.

Reviewing the appraisal report the owner found that the appraiser did not count the second level in the living area or any value. There was no view premium assessed as well. When politely confronted regarding these two items the answer the appraiser gave was alarming. No comparable sales were present over the last six months that had a similar view so no value could be given. The second level was not on the Appraisal District's records; therefore, he could not recognize it. I got the call after this input.

This clearly is poor judgment and flawed and inaccurate thinking of the appraiser. So views such as the above pphoto would receive no consideration if there are not any recent sales? If a home fronts a major highway would this is ignored as well if there were not any recent sales? Living area not included because of an error by the Appraisal District? I would dismiss this as a very poor report performed by an incompetent appraiser but I am told by other appraisers that do quality reviews that this type of thinking is becoming more and more prevalent. Afraid to adjust especially in a positive direction because no recent sales exist.

What has happened to good investigative analysis to determine premiums and common sense regarding proper reporting? Are all the recent changes and microscope reviews keeping appraisers from doing good accurate work? Will the more conservative underwriting override accuracy of reports and create difficulty in our selling process? Realtors beware and be prepared. Rridiculous... unfortunately no one will find this humorous just one more obstacle for us to hurdle.