Orlando Real Estate Sales are being affected by appraisers who fail to recognize appreciation
With the current Orlando Real Estate market on the rise, appreciation has become an actual factor again. It’s very common these days for an Orlando property to receive multiple offers on it thousands of dollars above the asking price, especially in the more desirable Orlando neighborhoods. One of the problems we are seeing here is that appraisers rather than taking into consideration the recent appreciation of a property, are just looking at the original listing price and are trying to get as close as they can to it.
The big problem with that is, if the house doesn’t appraise for the contract price, then the bank won’t finance the deal. At this point, there are three things that can happen.
1- The buyer can make up the difference by bringing cash to the transaction [This hardly ever happens]
2- The buyer will want to change his or her offer to the “appraisal value”, however the seller now believes their property is worth more than the original listing price and will refuse to go down on the price.
3-The deal falls apart and the process starts all over again unless the buyer can get a different lender or appraiser or both to try and make the deal go through.
Any way you choose to look at it, bad appraisals are affecting Orlando Realty sales.
Are Orlando Appraisers afraid of history repeating itself?
Back in 2004 through 2006, many appraisers ended up in deep trouble because of overinflated appraisal values. Things were soo crazy back then that it was common for Orlando Real Estate Investors to tell their appraisers what value they wanted the property to come in at and that’s what it would come in at. Everyone was making soo much money that nothing else seemed to matter. Fast forward to 2007- The doo doo hits the fan. Appraisers among other people in the industry such as mortgage brokers, etc. ended up in serious legal trouble for fraud. Inflated appraisal values, bad loans, illegal kickbacks, you name it, and any real estate professional with a license was getting in trouble for it.
I don’t blame appraisers for being extra cautious about not turning in inflated appraisals. That being said, I think that some appraisers are going to the opposite extreme now and are under appraising properties which are having a negative effect on Orlando Home sales.
Here’s a tip on dealing with the appraiser
Make sure the agents on both sides of your transaction have created a CMA [Current Market Analysis] that demonstrates how the market has changed in the past six months or less. Then make sure the appraiser gets a copy.
Your sale or purchase doesn’t have to be jeopardized simply because the appraiser doesn’t have — or chooses not to collect — all the relevant recent facts.
Jenny Zamora Lic Orlando RE Broker
