One of our fellow Realtor® Appraisers, Don Orttenburger, recently wrote a letter to the Editors of the Detroit Times, defending appraisers:
The tenor of the Feb. 16 article (“Builders losing on new homes”) was that if appraisers just found the right comparable value for a nearby home, everything would be fine.
Calculating a new home’s value means determining the value of the most recent sales of the most similar homes in the most similar location.
If the typical buyer can find the same or similar home for less money, why would they pay more? More to the point, why should the lender lend more than the value of what a similar home sells for (and take a greater risk)?
Remember, the appraiser is looking out for the interests of his client, not the builder or buyer.
I doubt that when it rains, people blame the weatherman — or when a doctor finds a cancerous tumor, people blame the MD.
And yet the article seems to find fault with the appraiser when he states the obvious — that prices have fallen and the same home can be had for much less money.
If more of my fellow appraisers had the backbone to be objective over the last 10 years and to not simply make the value fit the loan to keep the client happy, we might not have had such a dramatic and painful contraction in home prices.
Not a bad summary of the appraisal profession. Clearly, it’s not appraisers fault that the housing market is taking a hit right now. However, if more appraisers had just said “no” to the rampant pressure over the last several years, they might have been able to reduce the impact of this housing decline.