Has a low-ball appraisal got you down?
If so, you are not alone.
Just over half of all agents surveyed by the Massachusetts Association of Realtors said sales in their offices have taken a hit as a result of appraisals that came in under listing prices.
A significant number of those who answered yes had seen as many as three to four sales hit by low appraisals, which, if they don't kill a sale, can lead to some frantic last minute restructuring.
In fact, the Bay State numbers are significantly worse than the national numbers, which have been rising as well. The National Association of Realtors reported that 16 percent of all sales fell through in June, up from 9 percent in June of 2010. Low-ball appraisals were the main culprit, the trade group contends.
For a growing number of would-be home sellers and buyers, the numbers appraisers are throwing out are increasingly disconnected with reality.
Check out this anecdote from the Journal about a Dallas business professor and financial markets expert who contends the sale of his home was killed by a low-ball appraisal.
Individual appraisers are the easy fall guys in this, but it is clear that skittish banks, still recovering from the excesses of the bubble years, that are driving the process here.
And the level of paranoia on part of banks when it comes to signing off on individual home values may actually be growing, with the turmoil in Washington and the roller coaster ride on Wall Street having an unsettling impact on already timid lenders.
In some cases, low-ball appraisals seem to be giving banks leverage to force buyers to cough up larger down payments. If the buyer still wants the house, the only choice is often to put up more cash.
I have argued in favor of proposals for higher down payments, but this is not the way to go about it.
So what's your take on this? Have you been left shaking your head after a lower than expected appraisal on your home? And have the banks gone too far when it comes to tightening up their lending standards?
