You found just the right house at last. Or you are trying to lock in a low refi rate. You know what the house is worth, but the appraisal comes in well below value: what’s up with that? You are not alone. In today’s tight lending climate, if your house doesn’t appraise, here are the most common reasons.
- Under the new rules, your lender can no longer select, or even communicate with, the appraiser. They must use an independent – but often bank-owned – appraisal management company (AMC).
- The appraiser couldn’t find your house. The AMC maximizes profits by selecting the cheapest appraiser, regardless of their location. The appraiser may come from Pleasanton to value your Mill Valley house. And local knowledge, especially in eclectic communities like Marin County, is critical to determining market value.
- Your lender no longer can perform “value checks,” where appraisers informally pull comps to see if the numbers are likely to work for a client, before the actual appraisal is ordered and paid for.
- The appraiser was incompetent. AMC requires professional appraisers to cut their fees as much as 50%. Since the best won’t work for less, they hire the new and less skilled appraisers, who may perform less thorough valuations.
- There aren’t any good comps. With fewer sales, appraisers may need to look in dissimilar areas or go back in time to find similar properties that sold.
Call me if you have a problem. I can likely help you get the numbers up. Jack 415.302.7787
Posted by Jack McLaughlin 
