Big Bear Real Estate - Appraisals are not Fact!

Tyler Wood from Coldwell Banker in Big Bear Lake, CA discusses real estate appraisals and market value. Appraisals are an opinion of value based on one particular appraiser's knowledge and competency, not a statement of fact. The value that one appraiser comes up with can be totally different from another appraiser's value . Also, it is important to note that appraisal value is not the same as market value - the price a buyer is willing to pay. In today's volatile real estate market, it is crucial to use an appraiser who is knowledgeable and competent with the local real estate market conditions. To do otherwise is to gamble on the outcome of the purchase or sale.

Category:

People & Blogs

Tags:

• big
• bear
• real
• estate
• appraisals
• market
• value

[AppraiserMI]

Implicit in this definition is the consummation of a sale as of a specified date and the

passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed for exposure in the open market;

[whowood1]

@AppraiserMI That's fine. But, appraisals are still opinion. It says right on the appraisal, "In my opinion, the value of this property is XXX." And this opinion is only as good/reliable as the knowledge, experience, and competence of the appraiser. I had a property sell recently for $200,000 with tow separate appraisals, one at $165k and another at $190k. That $25k, nearly 10% difference on the same property. Absurd! My point still remains.

[whowood1]

@AppraiserMI The assumption is that a buyer who is paying more than appraisal value is not educated on the market or have some way being pushed or tricked into paying more. That does happen. I would also contend that many times the value is there, but the comps to justify it from an appraisal standpoint don't exist. Just because comps don't exist to justify it does not mean the value isn't there.

[AppraiserMI]

If a purchaser puts an offer in on a property where there is undue stimulus or they are not educated, then technically, that offer may not represent market value.

W T F is bank value?

[whowood1]

@AppraiserMI True.

"WTF is bank value?" - Unfortunately with video, it is what it is. I don't edit these. My point was not the term "bank value," but rather how banks/lenders/appraisers go about determining the value. They are restricted by the Guidelines - size restrictions, location or proximity restrictions, year built restrictions, etc. All of these things limit what comps they can pull and what value they can justify. And just because they cannot find comps does not mean a

[whowood1]

@AppraiserMI cont..... property isn't worth what the buyer and seller agreed to. 

[slhoo7]

even locate my office that has been in the same location for 20 years, I think that the appraiser might not be the best source of value. When I am asked by an appraiser to give them the comps, it makes me wonder why they are getting paid.

[slhoo7]

Unfortunately in Big Bear we have some appraisers traveling 2-3 hours to do an appraisal in an area that they are geographically incompetent. There are some very knowledgeable local appraisers that are not getting these assignments due to the HVCC regulations requiring an AMC. Tyler Wood sold over 90 homes in this market area last year, and I believe his ability to evaluate market value exceeds even the best appraisers we have available. When I get a call from an appraiser that can't (cont)

[AppraiserMI]

DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus.

[AppraiserMI]

(4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements

comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.