Paul's Appraisal Blog

    Many people think that when they order an appraisal, they are getting the product of a scientific or mathematical algorithm which, when applied properly, renders an exact number which represents the value of a piece of property on a specific date.

    Although an appraisal is the product of detailed analysis and computation, it is anything but exact. That is to say, an appraisal done by two different appraisers on the same piece of property on the same day could easily render two different values. This is because an appraisal is an opinion of value, not a scientific fact. The opinion must be supported by facts and analysis, but the conclusion is the product of human opinion.

    That being said, if the appraisals are done in a conscientious manner with proper analysis, the value conclusions should be very close. The problem arises when the client or borrower has a different opinion than the appraiser. In my experience, it is very common for a client to believe that their home is worth more than it is. They often point to comparable sales that are over 6 months old, or are much bigger or in superior condition. In this market, many people are still unaware that home values have been plummeting for the last few years and that home values today haven't been seen in 5 to 8 years, depending on the location.

    Although everyone is entitled to their opinion, it really doesn't mean much if it isn't supported by fact and detailed analysis. That's why we strive to keep abreast of the current trends in the real estate market and continually update our education on the latest data analysis techniques. In this market, one cannot haphazardly spit out appraisals (as some appraisers did in the past) without making a detailed analysis of the market and other factors contributing to value.

    If you have a question or would like more information about real estate appraisals, give me a call 760-525-2742 or shoot me an email at paulmcewen@cox.net. Thanks for visiting my site!!