Why are Appraisers Scared to Report Rising Home Prices?

by Isaac Benmergui, Esq on July 6, 2012

Have appraisers been so worried about reporting rising home prices that homes are coming to market undervalued? Bidding wars that are driving up prices in the Miami market seem to signal that appraisers haven’t been quick to increase the value of appraised homes in response to the upswing in the Miami-Dade housing market.

The National Association of Realtors report that 33 percent of its members report appraisal problems in May. Mortgage loan officers and real estate agents are also saying that appraisers are reluctant to figure local appreciation into their appraisals, fearing criticism of overvaluation. Lenders could face buy-back demands from Fannie Mae or Freddie Mac.

Even when appraisers have all the local data needed to make a fair appraisal, they choose the safe route and cite a lower value to keep the appraisal management companies happy. One appraiser reports that he received an appraisal back, which would was correct at a higher figure, and was told to correct it.

Getting Legal Help

Appraisals are only one part of selling and buying real estate. The law offices of Isaac Benmergui can help you with your legal real estate needs, whether residential or commercial; call 780-800-2510 or email Isaac@benmerguilaw.com for more information or to set up an appointment today.

 

 

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