The National Association of Realtors says nearly 25 percent of its members have reported clients losing a sale due to botched appraisals. The National Association of Home Builders, meanwhile, said low appraisals were sinking a quarter of all new home sales.
Roughly 40 percent of all home sales this year have been foreclosures or short sales, meaning that the property sold for less than the mortgage. This causes a problem for appraisers who look for recent comparable sales to set the appraisal price.
Appraisers determine the value of a property by looking at recent sales of comparable homes much the same way Realtors complete a CMA.
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{ 2 comments… read them below or add one }
Don’t the methods of appraising properties have a procedure to account for foreclosures? If not, they should have.
If you were a home buyer, wouldn’t you want to know the real value using all recent comparable sales, including distressed properties?