Real Estate Appraisals In The Time Of Coronavirus

Real Estate Appraisals In The Time Of Coronavirus

Well, with the Coronavirus pandemic in full swing the quality of real estate appraisals has sunk to new lows. It's to the point now where I wonder why they even bother with them since most are now just drive by. That's right. The appraiser just drives by the property and comes up with a number - I guess based upon interior photos and the exterior. I totally understand why they've gone to this extreme but I just don't know how they can do their job under these circumstances.

Here is an example of a situation on a home we had for sale in Buffalo Grove a while back. It was nicely updated with 4 bedrooms, 3 full baths, and a finished basement. We had 5 offers above $385,000 and the winning bid was for $387,000. Clearly this home was worth at least $385,000.

Unfortunately, Wells Fargo was the lender and they ordered a drive-by appraisal. One of the primary comparable properties was across the street but it was not updated, did not have a finished basement, and only had 2 1/2 baths. Oh...and it also needed a new roof which knocked the price down by about $12 - 13 K, resulting in a net price of $356,000. The appraiser added back $20,000 for the fact that our home had a finished basement. Try finishing a basement for $20,000. Then, instead of adding to the estimate for the fact that we had a third full bath instead of that half bath the appraiser actually deducted $6,000 because they thought we only had 2 full baths. I guess they didn't look at the real estate listing. So the appraisal came in at $370,000.

When an appraisal is so obviously flawed you can appeal it and you should win. Although we tried that our request was denied - even though the appraisal had glaring errors and omissions. So this is the world we live in now. Admittedly, it's not always this bad but this is an example of how bad it can get.