Thursday, January 23, 2014

Appraisers Are Adjusting To Reason

I could surely be wrong, I often am, in 2010 when Congress was rounding up their usual suspects (anyone but themselves) to pin blame to for the housing collapse, appraisers ran scared for cover. Easier for lawmakers to penalize people who were small enough to fail and didn't have the power of a lobby, so the appraisers were targets of least resistance. Appraisers responded accordingly: their appraisals would state conservative opinions. So conservative that the values were understated. The pendulum had swung.

In 2013 the pendulum moved back toward the right. Lenders adjusted to the rules and their focus is on documentation of the buyer's income. The appraisal is still scrutinized, but the pool of recent sales is growing and the evidence is being adjusted by common sense appraisers to support values consumers are willing to offer in a market regaining a competitive balance.

There will always be the appraiser or underwriter out there who has a motive, a fear,  or god-complex, but hopefully Karma has minimized their numbers. If you run into one with illogical conclusions, request a review or move to another lender. With inventory limited, demand may push prices north. Expect 2014 to be a year where qualified buyers and reasonable sellers have a cleaner playing field to move from offer to closing with minimal stress. That is if appraisers and underwriters don't fear for their careers.