What is My Home Worth?

In May, we told you about our personal experience getting our home appraised.  Well, the appraiser arrived as scheduled and completed his job in accordance with all the standards and ethics required by an appraiser (as far as we can tell).  We lauded his commitment to the job and time spent asking questions before even visiting the home.

In almost not time, priorities changed and we sought a new appraisal with a new lender. The new appraisal was performed by a different appraiser but our experience was similar to the first.  We had a brief conversation with the appraiser explaining the conditions of the home and upgrades made since it was purchased.  Although this appraiser was late for the appointment it appeared he too worked in accordance with all the standards and ethics required by an appraiser.

The second appraisal reported the home to be worth $50,000 less than the appraisal in May.  That would mean an 18 percent decrease in value in under one month’s time. Of course, both lenders stand by their appraisal.

We understand that markets are tough.  We’re looking at a double dip recession and the global economy is, at best, struggling.  However, 18 percent in one month’s time seems like quite a drop even for the hardest hit markets (the home is not located in the hardest hit markets).

Maybe the neighborhood is spiraling so quickly that within 6 months the value of the home will be down 100 percent.

Maybe two reasonable people looking at the same data can come up with two very different conclusions.

At the end of the day it begs the question: What is my home worth?

  1. Retired Appraiser

    Did you ask if the appraisers had been in business for 1 month or 1 year? I doubt that anyone with over 1 year experience would have accepted the assignment if it came through an AMC.

  2. Retired Appraiser

    If you truly want to know what your home is worth forget having the appraisal ordered through a bank or AMC and hire your own appraiser. If you are not using someone with 10+ years experience you’re throwing your money away. Obviously you would want to ask several more questions during the interview process. As tempting as it may be; avoid the yes man. Ask tough questions. A true profession will make themselves evident quickly…assuming that there is one in your market.

    Relying upon a bank ordered or AMC ordered appraiser is like playing the lottery. Somebody has to lose…it may as well be you.. It’s your money…choose the appraiser yourself. If the lender doesn’t like it tell them to take a hike and move your business elsewhere. There are plenty of starving lenders in this market.

  3. Where the appraiser is from is also important. If he/she is from out of the area he may not be familiar with the neighborhood and area. Many amc’s send appraisers out on assignment as much as 100 miles away. In a metro area that could amount to a bad appraisal.

  4. Jerome Nagy

    Editor’s note – The value reported by the second appraiser is actually $75,000 less (our subtraction skills are not what they used to be). The 18 percent is still accurate.

  5. Tim in Fla

    If the appraiser came from one of the large big bank AMC’s they already had a value indication before they set foot on your property. The largest AMC’s include a Automated Value Report (computer appraisal) with each order the appraiser receives. Be aware that this number is based on raw data and foreclosures, bank owned properties and even vacant lots may be used to determine the “median’ value. Exceeding this bank determined value and the appraiser may find themselves out of any future assignments. Market value indeed has changed to more like collateral value. Banks love review and second appraisals as it generates more fees to the AMC the bank has ownership interest in. Its a scam and hopefully regulation will curb this behavoir.

    Realtytrac just released data indicating that sales of distressed housing versus non distressed housing may differ by up to 27%. So much for the computer generated “median value” AVM report. Consumers need to be aware of what is going on in mortgage lending these days. Banking is making more money on loan application fees that actually lending.


  6. Glenda

    Perhaps the value didn’t fall within one month – maybe it was the first appraisal that was out of line. Love how everyone – even those with industry knowledge – always assume that the lower appraisal was the incorrect one.