The ongoing problem of low appraisals is continuing to have a negative effect on housing markets, with many deals falling through following an appraisal that comes in lower than the agreed asking price.
Home buyers have been left frustrated at their inability to take advantage of the market at present, with almost a third of realtor admitting that they have seen transactions fall through, renegotiated or delayed due to low appraisals, reported the Wall Street Journal.
Ron Phipps, ex-president of the National Association of Realtors, revealed that approximately half of his sales had been hit by problems with low appraisals.
Housing experts are laying the blame for low appraisals squarely at the feet of appraisers, who continue to take into account sales of distressed homes into their comparables when they value properties.
Terry Moore, of Accenture Credit Services, told the WSJ that as a result of the low appraisals, numerous buyers have been delayed for “extended periods”, due to the difficulty in finding comparable sales that can support the appraised value.
However, all may not be lost, as appraisers themselves have suggested ways in which buyers can counter low appraisals, reports the WSJ. According to them, borrowers have every right to provide their own comparable sales data and point out home improvements to justify their own valuation of the property concerned.
In addition, borrowers also have the right to request a review of the appraisal from their lender. In cases where borrowers can show the first appraisal was inaccurate based on their comparable sales data, it may even be possible to secure a second appraisal.