Appraisers: “Stuck between a rock and a hard place”

Home values are increasing in Miami, and the consequences are mostly positive. Home prices have increase as a result, but perhaps more importantly, rising home values have provided Miami a much-needed boost of inventory (though Miami’s inventory increased in early 2014, the amount remains historically low). However, the job of an appraiser remains difficult.

As Patricia Perez, a certified mortgage adviser with Sunbelt Lending Services, explains, “Appraisers are stuck between a rock and a hard place right now.” Out of necessity, appraisals are based on a neighborhood’s closed transactions from the past 90 days – six months at the most. Perez says this is at once a good and a bad tactic. Doing so, she says, helps prevent home values and prices from escalating too quickly, and ultimately limits the probability of another crash. Meanwhile, many sellers scoff at appraisals that reflect the aggregate values from the past three to six months, rather than the heightened values of, say, February. For now, better safe than sorry.

The government has put appraisers in a tough position, as well, according to Michael Murgatroy, branch manager and vice president of mortgage lending at Guaranteed Rate in Boca Raton. The government now requires many banks to utilize third-party appraisal management companies, as opposed to the past, when appraisers could be handpicked. Now, the companies assign appraisers and hold a fee. Many appraisers, looking to compensate for the lower pay, try to increase their volume of appraisals, completing them faster and often without regard for the best sale.