| Working generally as a San Diego California real | | | | appraisal, really acquiring a true reflection of their |
| estate listing broker, I frequently receive calls from | | | | impending new properties value? |
| appraisers who desire to validate the reported San | | | | If an appraiser looks at the $480,000 sale above, as a |
| Diego MLS sales price, ask about the condition of the | | | | comparable without inquiring about the concessions |
| property and if the seller gave any buyer concessions. | | | | ($14,400 in this real example) the appraisal will be too |
| When I say concessions, I am referring to payment of | | | | high. If the appraiser does inquire about the |
| buyer's closing/loan costs or adding some | | | | concessions, they have to consider the comparable |
| improvement to the property prior to the close of | | | | property was worth not $480,000 but $465,600! |
| escrow. Obviously, the appraisers were trying to do | | | | Without payment of the concession, it is not likely that |
| their best to ensure that their appraisals would match | | | | this property would have sold. If the real facts did |
| the true resale value. | | | | cause the new appraisal to come in below the |
| Almost two years ago, the frequency of these | | | | contracted purchase price, the buyer (paying for an |
| appraisal calls began to diminish and for the last 18 | | | | accurate appraisal) would be not be obligated to go |
| months or so, I personally have received possibly just | | | | forward with the sale. |
| one such call for my last six sales. | | | | In todays strong San Diegos buyers market, the buyer |
| Ive confirmed the phenomena of these vanishing | | | | would be in a very strong position to have the seller |
| appraisal calls with other local brokers. I also called a | | | | reduce the sales price to the accurate appraised value |
| few San Diego appraisers, but just one would talk | | | | and thereby potentially save thousands! |
| about this and only after assurance of anonymity. This | | | | Im not a licensed California appraiser, just a California |
| appraiser originally said with the new California State | | | | licensed real estate broker with three decades of |
| licensing law there were many more new appraisers | | | | residential real estate experience, Many may not be in |
| and questioned their competency. When pressed, he | | | | agreement with the fact that these concessions |
| very reluctantly conceded that my assumption that the | | | | reduce the real resale value of properties. I can |
| real pressure to bring in the appraisals at the | | | | understand their opinion. But, I think they are dead |
| contracted purchase price (all San Diego resale | | | | wrong! |
| appraisers have a copy of the purchase contract prior | | | | No seller I know, is willing to give away thousands of |
| to inspecting the property) was causing them not to | | | | dollars of their equity if they could avoid it. This is a |
| question the listing broker on condition or especially, | | | | classic example on the part of pressured appraisers, |
| seller concessions. | | | | of hear no evil, see no evil! |
| Its my view, in our current San Diego real estate | | | | The easy correction to this problem would be a State |
| market, that it is exceedingly rare for a buyer not to | | | | requirement that appraisers of residential properties |
| get concessions from the seller. Im not talking small | | | | use due diligence to confirm the full details of all |
| change here; these real life recent sales show: | | | | comparable sales used in an appraisal. Until this |
| La Mesa $362,000 sale - $4,500 credit to buyers | | | | happens, I would advise San Diego home buyers to tell |
| San Carlos $480,000 sale - $14,400 credit to buyers | | | | their mortgage lenders that they want a copy of the |
| Mission Valley $360,000 sale - $10,000 credit to buyers | | | | appraisal and will be looking for some notation on the |
| San Carlos $385,000 sale - $10,000 credit to buyers | | | | document showing that the appraiser made inquiry into |
| So, are the San Diego real estate buyers who are | | | | both the condition and possible concessions on each |
| now paying approx. $375 for a residential real estate | | | | comparable used. |