The Highs and Lows of Appraisals

Thinking of selling your home?  If you’ve been waiting on the sidelines for better market conditions, wait no more!  Now is the time to reap the benefit of a low inventory, rising home prices, and motivated buyers. 


Our present market offers all of these advantages, but to enjoy them to the full, you need the guidance of an experienced broker agent.  Everyone knows that home sales can be complicated and full of “gotchas.”


Take appraisals, for example.  Appraisals are a critical but often overlooked component of the home selling process.  An inexperienced agent could lose you lots of time and money through a botched appraisal.  A low appraisal can hurt your chances of making a sale at the price you want because it puts a ceiling on the amount of money the lender will lend to the buyer.  Due to revisions of the appraisal system, many home sales have failed because the agents lacked the experience to obtain the most favorable appraisals for their clients.


Before the changes to the appraisal system were put into place, appraisers often tried to hit the value that would make a transaction work and were thought to be unduly influenced by investment officers.  The 2007 Home Valuation Code of Conduct (HVCC) was intended to build a wall between the loan officer and the appraiser.  To adhere to the code, lenders require originators to place their appraisal orders with an Appraisal Management Company (AMC).  The AMC, which maintains a pool of appraisers, then contracts with a randomly selected appraiser to perform the work on behalf of the borrower.  This new mode of operation had unintended consequences.  Experienced appraisers lost their best customers while the AMCs, which tend to use less experienced, lower paid appraisers, came to dominate the profession.  Due to their inexperience and the expectation that they will cover a wide service area, the AMC appraisers often lowball properties because they are unfamiliar with local markets and they are under pressure to appraise homes at a rapid rate.  Inexperience may also cause these appraisers to make mistakes such as using distressed properties as comparables.  While an experienced local appraiser would be familiar with the specific properties and neighborhoods and know, for example, why properties on one side of a road should be valued higher than another, appraisers who cover wide territories cannot possess this kind of detailed, local knowledge.  Meanwhile, experienced appraisers have been forced out of the market because they cannot compete with AMCs. 


The National Association of Realtors and the National Association of Home Builders have conducted member surveys that found that the appraisal system often produces valuations below the agreed-upon price in sales contracts, causing delays and disputes among sellers and buyers.


How can you avoid being burned by a bad appraisal?  Your best insurance is to work with a broker who has extensive local, on-the-ground experience in selling homes in your neighborhood.  Working with an expert does not guarantee that your property’s valuation will align with the sales contract price, but it does provide you with the confidence that your home appraisal will be accurate.  Your experienced real estate agent provides information directly to you prior to the start of the appraisal process.  This information will include properties currently available in your neighborhood, properties under contract agreement, and recent sales.  This data combined with your real estate agent’s guidance will provide you with a fairly accurate idea of what the appraisal figure is likely to be, so there will be fewer surprises that could derail a sales contract.


Our local real estate team gathers and documents all pertinent details about the property from the owner such as upgrades, improvements, and when the property was purchased and for how much?  The team is careful to make the appraiser aware of these improvements and their relevance to the property’s valuation and thus rationalize the contract price.  Our experienced team goes the extra mile; we offer to meet with appraisers at the property to discuss the appraisal and provide relevant market data and comparables on homes that support the contract price of the property.  


Speed is of the essence in closing a real estate deal and this attention to the appraisal process enables lenders close loans more quickly.


Northern Virginia has one of the strongest housing markets in the US.  There is less than a month’s supply of available homes on the Northern Virginia market.  The Northern Virginia Association of Realtors (NVAR) says there’s been a significant decrease in inventory in just the past year.  This limited supply means that home prices are rising and now is a great time for you to put your home on the market. Our team is selling most of our listings for asking price.  Nearly all our listings successfully pass through the appraisal process.


The time is now to sell your home!  As home prices rise, buyers are becoming more motivated and anxious to close a deal before the current market conditions of historically low interest rates and low prices vanish.  You’re looking at a window of opportunity that is closing quickly.


Our website,, offers lots of helpful information and services such as a step-by-step guide that walks you through the home selling process and a guaranteed sale program.  To safeguard the equity that you have put in your home and realize its full value at the time of sale, contact Linton Hall Realtors, (703) 485-4663 or via e-mail, [email protected]

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