Business Insider shows in this that they have no understanding of what an appraisal is, what market value is, or what an appraiser does. Here we'll break down the misinformation that is so common against our profession.
It is genuinely hard to read more than a sentence before finding a half truth, misrepresentation or flat out lie in this article, so we'll just cover the worst offenders.
"US home prices are surging higher at the fastest pace in at least 45 years.
Many appraisers, however, don't think it's so bad. They continue to downplay this home inflation, adding one more nuisance for buyers already pummeled by the red-hot market."
Wow, where to start. The idea that appraisers didn't think that home values were increasing as fast, or didn't think inflation was a cause shows this author has never spoken to an appraiser. The issue is that due to FNMA standards and appraisal can only be a backward looking exercise. Appraisers don't get to dust off their crystal ball and guess about what the market will do in a month. We use the most recent and comparable sales in order to determine the market value. Our value can only EVER come in within the range of comparable sales because FNMA won't write the loan if this isn't the case. As to the appraisal being a nuisance... only if being informed as to the market value as of the inspection is an nuisance. Being able to make an informed decision when you're "putting your money where your mouth is" is a pretty great service in my opinion.
"It can also be hard for appraisers to separate actual market trends with "emotionally driven" purchases..."
This isn't a factor in an appraiser's analysis. We look at data. Period. The data doesn't show us tears or laughter. It's numbers. This sentence is gibberish to an appraiser.
"Put simply, homes are frequently selling for more than appraisers think they're worth."
An appraiser is the only person with a state or federal license to determine the market value of a home, which is an important fact to remember. This sentence in regard to any other profession would be terrifying, "Simply put, Jane thinks she has less cancer than the doctor tells her she has." "Simply put, John thinks he's more innocent than his lawyer thinks he is."
"In a fast-moving market, upwards or downwards, a home that sold and went under contract two months ago and closed one month ago may not be representative of the current market conditions, It can be difficult to pin down the actual appreciate rates for anyone, including appraisers."
Yes. In a rapidly changing market it is hard to determine the trends. So how about we leave it to the professionals and stop spreading misinformation and lies.