Prior to 2008 it was common for homes and properties to appraise at sales price or marginally above. But since the real estate market shift in late 2007 and 2008, new lending practices are scrutinizing appraisers and the appraisal process. And it's justified and long overdue - given the foreclosure frenzy. So how does this impact appraisers, buyers, and sellers?

Appraisers are now asked to go back only 3-6 months to find comparable properties. These comps may even include foreclosures and distressed properties! Geography has tightened - comps are to come from the same neighborhood if possible - this can be a challenge due to fewer home sales. Drive-by appraisals are almost non-existent; often appraisers are required to visit and evaluate a home multiple times. These are just a few of the changes!

The Komar Team counsels buyers and sellers about these changes, and their implications when buying or selling a home. For instance, when representing a buyer, the purchase should always be contingent upon the home appraising at sales price. On the other hand, sellers must understand that there is now another potential negotiation step when there's a contract on their home - the appraisal!

All this said, in the past year and over 40 Komar Team transactions, we've only had two where there was a potential problem with the appraisal. BUT - in today's market, sellers need to more mindful than ever before of current comps relative to the list and sales price of their home.

Cindy Komar
Associate Broker, ABR
The Komar Team
www.thekomarteam.com
770.235.9032