For most Americans, their home is their largest investment but what its worth is a matter of debate. A strong debate. Bank-hired appraisers suggest that properties are worth less than a privately hired appraiser might say. The difference can be tens of thousands or even hundreds of thousands of dollars. The difference can be getting a new, low-interest rate mortgage or not. The difference can mean $1,000 or more per month in your pocket. Its major.
The appraisal business has changed drastically since the real estate crash of 2008. In the old days (pre-2008) real estate appraisals were more of an art-form than a science. Lenders or clients could pick their own appraiser and could sway said appraiser to basically get the value needed to buy the home they needed, pull out equity from an existing home and or refinance a home. Today, the rules are much more stringent. Banks are tight-wads with their money and have little to no risk tolerance. Literally, the pendulum has swung the entire other direction from the mid-2000s. On a lot of levels, that's a much more safe position. You also can't pick your own appraiser thus you get the pick of the litter. That can be good or bad depending on the luck of the draw.
One interesting example of an appraisal story comes from the palm tree lined streets of Beverly Hills. Jade Mills one of the top producing real estate agents in the United States each of the last 20 years had a client who was looking to refinance a home in the Beverly Hills Flats. The comps where clearly showing that houses smaller and without as many high end fixtures such as Sub Zero refrigerators, Wolf Appliances, outdoor kitchens and infinity pools was worthy over $500,000 more than the appraiser for the bank was suggesting. This was keeping the bank from lending what the client needed. Jade's staff was able to help the appraiser find other comps and explain the complexities of the neighborhood in a way that suited the needs and demands of everyone involved. Her client got the loan they needed and today the house is worth nearly $2,000,000 more than what they paid. It was a total win-win outcome.
Another California real estate appraisal story comes from the famous beaches of Malibu. How do you appraise for view? Especially when the view is seemingly all the way to Maui? This was the challenge for a property for top producing real estate agent, Chris Cortazzo had on the sell-side of a transaction. Everyone thinks their beach home is worth $10,000,000 or even $20,000,000 but how do you convince an appraiser for a seller that you are correct? Through years of comps and inside information on homes that sold privately, Cortazzo was able to do just that. The seller listed at $8,000,000 - not $10,000,000 and the home was in escrow in 15 days. Yet another winning transactions.