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 a new appraisal system, many home sales have failed because the agents lacked the experience to obtain the most favorable appraisals for their clients.

Before the new system was 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.  Owner/Broker Ashley Leigh and his Linton Hall, Realtors® team are the sales leaders in Northern Virginia; they sell a home every day of the year.  This extensive experience makes Ashley and his team expert in ensuring that your home appraisal will be accurate.  Ashley’s team provides prospective home sellers with a FREE, NO-OBLIGATION comparative market analysis (CMA) of their property.  This information includes properties currently available in your neighborhood, properties under contract agreement, and recent sales, so all parties have 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.

Ashley’s team guards against low-ball appraisals by doing the appraisers’ homework for them.  The team gathers and documents all pertinent details about the property from the owner such as upgrades and improvements, 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.  Ashley and his team go the extra mile; they 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 2 month’s supply of available homes on the Northern Virginia market.  The Northern Virginia Association of Realtors (NVAR) says there’s been a 33 percent 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.  NVAR statistics indicate that recent sellers have been able to sell their homes for 97 percent of the listing price.

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.

To safeguard the equity that you have put in your home and realize its full value at the time of sale, contact Ashley Leigh at Linton Hall, Realtors®, (703) 485-4663 or via e-mail, [email protected]

About Ashley Leigh

Ashley Leigh is one of the most successful real estate agents in the United States and founder of Linton Hall, Realtors®, the premier real estate company in Prince William County, Virginia. In his book Billion Dollar Agents, Steve Kantor featured Ashley for individually producing well over $2 Billion in career sales selling thousands of homes. Ashley Leigh's innovative marketing programs have been have been written about in Fortune magazine. Additionally, Ashley has been profiled in RISMedia’s Real Estate Magazine and Power Team Report and has been recognized by REALTOR Magazine as one of the Top Sales Agents in the U.S. The Wall Street Journal ranked Ashley as one of America’s Top 20 Realtors in the Nation for his sales production for several years. Connect with Ashley on Google+

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