Mobile Realtoreality

During the housing boom a few years ago, appraisers were not held accountable for inflated pricing estimates. The demand for homes was high, it was a sellers market, and mortgages were more easily available. No one saw the recent downfall in the housing industry coming;  or if they did, ignored it. According to numerous reports, appraisers were pratically writing appraisal reports to the satisfaction of the sellers and not to the guidelines and specifications mandated them. And no one was questioning.

Now with a flatline effect in the housing market and the financial crisis of lending institutions, appraisers are definitely under the microscope. As a result, appraisals are not always coming in at a satisfactory level of pricing sought by the sellers. So then what happens? If a buyer has submitted an offer at the original asking price and the appraisal is lower, a couple of things can happen. Either the seller can agree to lower the price, the buyer can pay the difference out-of-pocket, or the deal falls through and most likely the house is withdrawn to list later.

Another situation can also occur. In the instance of newer construction in Downtown Mobile, for example, there may not be similiar homes to run comparables. So what happens in this case? The apprasier can deduce a price by assigning a value to the property, then assessing a square footage costs based on what it would costs to reproduce the home, and finally apply some depreciation value. The second and more important approach is to apply comps. In any result, buyers will not be able to secure a mortgage higher than the appraised value. A seller or I suppose even a buyer, could request a second or third appraisal to confirm or negate the first appraised value.

But in the end, it doesn't really matter how a seller prices a home; the appraiser basically has the final say.