By Kay Wilson-Bolton
May 30, 2003
There is a group of professionals in the real estate business who labor under the very heavy burden of time frames, anxious clients and REALTORS®, ever-changing guidelines, forms and schedules. They are the mysterious, seldom seen people with a clipboard, measuring tape and worried look.
They are called appraisers. They try to please everyone and lately have the ability to please no one. They are pushed by the market and the individuals affected by it to bring the value of the latest sale into conformance with it’s sold price. Some appraisers have an easier time than others matching the persuasion of an increasing market. Some appraisers are not jumping as high as the new sales price.
The REALTOR’S® skill in marketing the property, finding the buyer and opening the escrow is unraveled with the poor appraiser can’t squeeze any more value out of that number.
A recent situation will describe this well. An LA-based family inherits a property in a local town. The REALTOR® advises a market value of $475,000 but they are convinced that the buyer will come from Los Angeles and they wanted to list the house at $549,000.
They were 50% right. The buyer did come from Los Angeles–so did the lender and the appraiser who just don’t see the value in the same way. The third buyer is also from Los Angeles, so is the lender and the appraiser. No way, they say. So here we are, since August 24, 2002 dealing again with an appraisal that is below the asking price.
The sellers are now exhausted and want the proceeds from the sale of their vacant house.
The best strategy now is to price the property at the new market value and be prepared to look at a different price if necessary so that the sale can go forward–unless of course time is on your side and you have no place to go anyway.
Four things can happen with a low appraisal. The buyer can cancel the transaction, not wanting to pay more than the appraisal. The seller can reduce their price to match the appraisal. The buyer can pay the difference in the sales price and the appraised price if they don’t mind paying more than the appraisal indicates the value to be; or buyer and seller can split the difference with the buying bring in additional cash.
We all need to have more compassion for the appraiser trying to please us while staying true the high calling of their procession.
Now that I think about it, that goes for just about anyone trying to earn an honest living.
Kay Wilson-Bolton is the owner and broker of CENTURY 21 Buena Vista and CENTURY 21 Ojai Valley. She brings a regional perspective to local issues. She can be reached at 340.5025.