If working with a real estate appraiser feels like a frustrating and complicated matter, you’re not alone. There’s a reason it feels as though your appraiser is keeping something from you and that’s because he or she is keeping secrets. Here are a few things you probably didn’t know about your appraiser.
- Appraisers are Under Pressure
When the housing bubble burst a few years ago and created the Great Recession, mortgage lenders weren’t the only ones that took the heat. Appraisers also came under fire and the Dodd-Frank Wall Street Reform and Protection Act of 2010 now requires the government to keep a closer eye on all real estate appraisers. This is why the process is so much more complex and takes more time.
- Appraisers are No Longer Local
Those same reforms have created a situation in which appraisers are often sent to regions with which they have no familiarity. Since they don’t know the markets that are local to the properties they’re appraising, their estimates may be either too low or too high. This can keep a homeowner from getting the true value for their home and, conversely, can prevent a buyer from affording a home that should be within their range.
- Who Does the Appraiser Really Work For?
In a normal home-buying scenario, the buyer pays the fee for the appraiser, which can fall anywhere within the $350 to $500 range. Even so, the appraiser doesn’t work for you and his reports go directly to the lender. This means that neither the buyer nor the seller will likely see the appraisal firsthand. According to federal law, you have to be given a copy of the appraisal, if you submit a written request for it. However, most people aren’t aware of the law, so they never see the appraisal for which they paid.
- Always Get a Second Opinion
It can be beneficial to get an appraisal of your own in advance, so you’ll have something to compare to the official appraiser’s findings. This can be fairly simple by asking your real estate agent to deliver a broker’s price opinion. While your lender may not accept the broker’s opinion in place of the appraisal, it does provide that point of reference. A difference in estimates can end up saving you as much as $20,000 on a home purchase.
Appraisers won’t tell you everything about their jobs. This is partly because they have to react to pressure from banks and that affects every appraisal. By staying alert and seeking outside advice, you may be able to better ensure your appraisal is fair and on point with the area market.