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December 15, 2010

Crazy Hazy Appraisal Madness

Hi Folks,
   Hope your week is coming along great, so far.

   Well, considering the fact that we put a man on the moon and that we have found cures to a vast amount of the illnesses that have plagued mankind, you would think we would have this appraisal thing licked by now, right? Well, not exactly !

   To bolster this argument, this morning, I read a story on Yahoo Finance about a couple that were looking to purchase a specific home, and who shelled out $1600 for 7 appraisals, each of which was different than the other...and some of them by substantial amounts. Ultimately, due to this fiasco, the couple wound up renting the home that they actually wanted to purchase, but could not due to the scattered and lower appraisal(s).

   Since a majority of the trades on the stock exchange are done via computer, isn't there a way to have a universally-accepted appraisal program that spits out a figure? Perhaps there can be 3 programs (as with credit scores/FICO), with a Low, Middle, and a High. In that case, lenders can choose to accept the middle price, an average, or some other computation. I realize that my Appraiser friends are turning bright red with anger, but it should be a system that is created, organized, and computed by Appraisers, and they would still need to go on-site to verify all features of the property.

   Please don't yell at me for this one...but I am a stickler for automating procedures to minimize variation and errors. What are your thoughts on this proposal?

Have a Great Day, and Happy Rent-to-Owning !
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Tags: #appraiser #appraisal #finance

1 comment:

  1. I truly agree with you,

    I would love to have a automated system to run my values. There are to many appraisers marketing up these homes, even now after the house bubble. I understand that these folks are trying to get the best value for that subject home as well as help out the future or current homeowner. But, when we still have foreclosures hitting the market, homes sitting for vast amount of time, appraisers comparing proprieties miles away from the subject home and not to mention unethical investors coming from different parts from the country and paying appraiser "hush money" to give them a better number. Its very hard to trust any appraiser unless they have credentials and reference. Just my two cents

    Jason Smith
    Partner, Smith & Graham Investments
    Partner, TDL Capital LLC

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