When Selling Your Home, The Appraiser You Choose Matters

Most people aren't aware of a serious problem seeping into most real estate transactions these days that's causing more and more sellers to think about how to sell a house for cash just to avoid possible delays. The problem I'm talking about concerns real estate appraisals and it will very likely directly affect you and the sale of your house, so it's important to understand the recent changes in appraisal methods being used by national lenders.

The simplest explanation of the problem is realizing that it's cheaper to use county tax assessor's records public information available for free than it is to hire an appraiser with professional credentials to show up at a house to make an appraisal. Although this seems sensible enough, in the real world it's causing a big problem for buyers and sellers because county tax assessors don't necessarily have correct information for someone who is trying to sell a home.

And lenders' computers are not capable of selecting comparable properties the same way a human being would do it. In other words, lenders have computer programs that are programmed to prefer proximity as more important than similarity. Here's what I'm talking about: You own a 2,700 square foot brick house built in the last 15 years on a lot in a more established neighborhood.

Although many of the older frame houses in your neighborhood are the same square footage or larger, they are considerably older and they are not brick construction. Computer programs do not automatically select another brick house as a comparable property. They might select a much older, frame house beside your brick house just because it's next door. That's the consequence of using proximity not similarity as a programming preference. It's easy to see how this can create big discrepancies in the appraised valuation of your house. An appraiser could see the disparity and select a group of brick houses that are relatively close by, even if they are not in the same immediate neighborhood. And an appraiser has access to get inside your house and see for himself how it is unique, establishing value in person instead of relying on a computer program.

Those unfortunate sellers who have experienced a failed sale transaction due to a computer-generated appraisal will generally tell you that that their experience is happening more and more often. It's becoming a big problem with national and online lenders, while local banks tend to rely on local appraisers for accuracy and because it works better for the buyer and seller as well as the bank. If you find yourself in a awkward situation because you have lost a sale you may consider selling a house for cash so that you can move on with your life.

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