In Kenneth Harney’s column Appraising a Shifting Market [Washington Post] he explores how appraisers are dealing with a changing market. The advice is based on good common sense and really applies to all markets at all times, not just in a changing market.
- Stay current, stay local.
- Understand behaviors of each price strata. In the Tampa area, for example, the entry-level segments are more solid than the middle and upper price brackets.
- Get input from local agents, they are on the front lines. Specific transactions may not be representative of current market conditions due to extenuating circumstances.
- Withstand the intense pressure from all parties to the sale but be open to considering data that was missed in the original appraisal.
Get those who are pressuring you to provide data that is comparable and can be verified. The appraisal that was completed was a result of our best effort at the time. If we missed something that clearly shows we are low, we will consider the new information in the context of what was already presented, but that doesn’t happen very often, because the data usually doesn’t exist.
An appraiser whom I deeply respect once told me in a sarcastic tone: Isn’t it amazing how everyone is so much smarter than the appraiser?” Lenders, mortgage brokers, real estate brokers, developers, buyers and sellers all know the right number. We are just here to fill out a form.”
Depending on how the market does over this next year, appraisers may turn out to be smart afterall.