Here is the scenario… You decide you want to buy a certain “For Sale By Owner” home and the seller informs you that the house “appraised” for $280K only two months ago. He is asking $280K, but will let you have for it for $270K. You might be thinking…. Hmmmm, such a deal!.. 10K instant equity!! After all, it is a certified appraisal completed by licensed appraiser. In a perfect world, an honest, credible appraisal by a competent appraiser SHOULD be reliable, unfortunately, it may be not.
The first thing I would recommend is to obtain a copy of that appraisal. If the seller refuses, the appraisal probably does not exist. If the appraisal is produced, the next step is to find out WHO order the appraisal and WHAT was the purpose for the appraisal.
What if the appraisal was “fluffed” up so to show more equity so the owner could refinance?
What if the appraisal was ordered by the seller’s “soon to be divorced spouse” who wanted to prove the house hubby was getting was worth more?
Maybe the appraiser was inexperienced and not familiar with the area?
What if the appraisal was completed by a real estate broker who wanted to make the seller “feel good” about the value of the home in hopes they would “like the agent” and list their home with them?
The point is that, if you do NOT order the appraisal yourself, you don’t know what the motivation or qualifications of the appraiser are. I only trust two types of appraisals… 1) the ones I complete mself and 2) the ones I personally hire someone to complete.
I truly believe that if you want an unbiased appraisal when purchasing a home, you should hire your own independent appraiser. Yesterday, I did an appraisal on a home in the North End of Manchester. I was doing an appraisal for a lender who was going to finance the purchase of a 3-family investment property. The buyer met me at the property and asked me “Do you represent me or him (the seller). I informed with that I represented the bank and not him. Now, the fact that I am honest, competent and will provide an honest appraisal to the bank will indirectly benefit him, but what if I was not? When this nervous guy told me he was nervous because he was putting most of his savings into the building purchase, I decided that I NEEDED to make this point my friends………………… If you are truly concerned (and you should be) about the value or marketability of a home you are buying… Hire you OWN appraiser. If you would like to discuss the appraisal process, don't hesitate to email me at firstname.lastname@example.org
P.S. I may have painted a poor scenario of the appraisal profession. The truth is, like most professions there are always a few bad apples. The vast majority of the appraisers I know are honest and try to do a credible job.
Speaking of people trying to do the right thing...........................
It was a “Great Day at Keller Wiliams”
Hats off to my real estate collegues over at the Bedford Keller Williams Realty office. On Thursday they sponsored a terrific fundraising gala over at Fratellos in Manchester. A few hundred real estate professionals, KW clients and everyday folk joined together to raise several thousand dollars for charity. Alan Rice, Bill Weidacher, Mark Mulcahy and the woman who really runs the show, Debi Levine(love ya Deb) did a great job putting together a great evening. There are some great people in this business, and that office has a lot of them.