Appraisers are ruthless! No longer do we fear the inspector’s report, we shudder when the appraiser’s time has come. Yes, some of it is that the comps are mostly distressed sales and they are just dealing with the facts. However there is no allowance for ‘normal’ sales when compared to these default fire sales, desperate short sales, or foreclosed bank-owned sales. Of course every distressed sale then pulls the market sharply lower thus causing more distressed sales.
Appraisers are abused! The government and institutional lenders tried to blame the appraisers for causing the industry crash. They implemented ‘a better idea’ and a new ‘independent and autonomous’ bureaucracy was inserted between the appraisers (small business owners) and the mortgage brokers and bank loan officers (their clients). This system takes much of the appraisers’ money out of their pockets to pay the new kids on the block, and eliminates their ability to build their local businesses and make more money the way every other business grows. Imagine you cannot talk to the people who would purchase your services?!? Many of the best appraisers quit or work only with local banks who can avoid this regulation and many newbie appraisers got into the business. They make mistakes and we Realtors® kindly point this out on behalf of our clients (because we actually know the markets) but they cannot admit wrong or they will lose their jobs. Many appraisers are also working geographic areas they know nothing about. The mistakes are often tragic (could we tell stories!). Fueling this is a chilling effect in their industry. For their own self-preservation, appraisers seem to err on the side of conservatism and grant no leeway for value. Why? Do they want to kill property values? No, they just want to keep their jobs in a time when threats from the higher-ups abound. It is not good!