Consumers often believe that appraisals are the absolute gospel truth about a property’s value.
If the appraiser says it’s worth X, then it surely must be worth X.
Those of us in real estate know that appraisals are subjective and that they are simply one person’s opinion of a property’s value.
Skilled, experienced appraisers know many subtle ways to “adjust” to comparable sales to come in with a value equal to the sales price.
And, appraisers are under enormous pressure to “bring in the number” on appraisals because they know they won’t see any more appraisal business if they start screwing up loans for the lender giving them their appraisal assignments.
Some lenders are now trying new “AV” (automated value) appraisals in an effort to speed up loan processing and remove the human variable from the appraisal process, but automated value appraisals are also subject to inherent inaccuracies.
The best indicator of a property’s value remains what we all learned in Real Estate:101 ~ it’s worth what a willing buyer will pay for it.