You gotta know the territory
I had a conversation with a listing agent whose seller is insisting on a price that has no basis in current comparable properties. Partly, it is an odd-duck kind of place. Partly it is over-improved (that means that it is too nice for the building and the neighborhood.) Partly, the sellers bought it at peak.
My buyers like this place. When I did my CMA, I could not justify the price. Not even close. I asked the listing agent what he was thinking. He gave me comparables in a totally different neighborhood (it would be like comparing Jamaica Plain to Back Bay.) When I said that the comparables don’t work based on location and an appraiser would know that, he reminded me that the appraiser may very well be clueless about this location issue.
He might be right about that.
Enter NAR. Friday, I got an email telling me the NAR has succeeded in making important clarifications in Home Valuation Code of Conduct (HVCC.)
First, it states that lenders should use appraisers who have clear experience in the geographic area.I am often on the other side of the issue when it comes to NAR lobby efforts. On this one, I agree more than usual. It is important, especially in urban areas, that the appraiser know the territory. I have seen some really foolish comparisons used by appraisers who don’t know one urban neighborhood from another.
Brokers, are you still seeing appraisers who don’t know anything about the town they are appraising in?
Appraisers, are you asked to work in too many places?
Buyers and sellers, have you had appraisal problems that caused the cancellation or delay of your transaction? Do you think the appraiser was wrong? Do you think the appraiser had no background in the town your house is in?
