A: The lender has to go through a pool of appraisers and they are supposed to randomly pick one appraiser from that group who then goes out and appraises the property. The problem that I have seen lately over the last couple of years is that the entire process, including the loan, is at the mercy of the appraiser.
It is really a combination value of opinion and fact. It is very subjective. For example, a house is $600,000, and you have properties in that neighborhood ranging from $550,000-$650,000, and an appraiser goes in a appraises the house for $580,000.
That, percentage-wise, puts the buyer in a bad position. Obviously, you have a buyer that is willing to purchase a property for $600,000, but the appraiser put it at a value of $580,000 perhaps because they pulled lower comparables. We then sometimes show them higher comparables and the appraiser might not go back and change it. It can cause some problems with buyers because of that subjective opinion that they throw in there.
— Eric Coan, Eric Coan & Associates, 832-526-5139
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