Real Estate Appraisals - Buying/Selling Trouble?

[cj1]

Has anyone run into trouble lately with lendor ordered appraisals coming in below the expected value ? Most of you know the market is crazy right now, with some properties becoming the subject of bidding wars hours after their initial listing and going for significantly more than their asking price. I am concerned that appraisals may not be keeping up given how fast the market is moving, and that in turn may making buying and selling harder.

 

For the record, I am attempting to sell in Shady Acres and move to the Heights.I have a contract on a new (to me) house in the initial closing stages and am waiting for it to get further along before I put my current house up for sale. Obviously, I can get hit with this on both transactions.

 

cj1

[flatline]

I ran into a problem with an appraiser in the last year or so in the context of a refinance.  After the 2008 crash, regs were put into place to try to prevent banks or brokers from being too cozy with the appraisers and getting an inflated appraisal to justify an iffy loan.  But now the problem is that there are appraisers who accept jobs in neighborhoods with which they have no real familiarity.  There's obviously a lot more work that has to go into appraising an older house in the Heights (or Shady Acres, or Timbergrove) than in a new, consistent, homogenous subdivision in a master-planned community.  For example, we're in the core of the Heights, zoned to Harvard Elem.  The first appraiser assigned to our re-fi used "comps" from east of Main and north of 20th/Cavalcade.  Huh??  I tried to reason with her, but she wasn't interested in hearing about the nuances of our 'hood and issued her appraisal well under what any realtor working in the Heights would pin as market value.  We couldn't un-ring the bell and had to start over with a new application.  The second time around, I was absolutely insistent that the bank had to get someone who had worked in the area, and luckily that's what we got.  The appraisal came in where we expected and we lived happily ever after (notwithstanding several weeks of hassle and the cost of a second refi application).

 

A realtor friend of ours likes to say "there's no such thing as comps in the Heights".  That's an exaggeration, but I'm sure the same general principle applies for Shady Acres.  To the extent you can, lean on your lender to insist on an appraiser with experience in your area who is willing to put in the work to find real comps -- not one who will just go through the motions.