Accurate Appraisal Underreporting
The HousingWire article highlighting that only 40% of homes sold include an “accurate” appraisal, as defined by the Corporate Settlement Solutions (CSS) report, is deeply problematic and indicative of a concerning lack of understanding around the appraisal process. The report cited from CSS, analyzed appraisal data across 10 states in the East Coast and Midwest, finding that only around 40% of home sales included an appraisal that was within $2,500 of the final sale price. This is being presented as evidence that the vast majority of home appraisals are inaccurate.
Appraising a home’s value is an inherently complex endeavor, with numerous variables and nuances that must be carefully considered. To claim that any appraisal falling outside a $2,500 margin of the sale price is “inaccurate” is an egregiously narrow and simplistic view that fails to account for the realities of the housing market. Given that the median home price in the US currently sits around $420,000, a $2,500 discrepancy represents a mere 0.006% deviation – an infinitesimally small margin that in no way calls into question the validity or reliability of the appraisal. This misguided definition of “accuracy” is both misleading and dangerous, as it perpetuates the misconception that appraisals should be precise to the dollar, when in reality, there is always going to be a degree of subjectivity and variability involved.
Rather than publishing such a reductive and sensationalized take, HousingWire would have better served its readership by delving deeper into the complexities of the appraisal process, acknowledging its inherent challenges, and providing a more balanced, well-researched perspective. Shame indeed on HousingWire for failing to uphold journalistic integrity and perpetuating a harmful narrative around a critical component of the housing industry.
“The gap between home appraisals and sale prices is rising.
That’s according to a new report from Corporate Settlement Solutions (CSS)…
Properties were considered accurately appraised if these values fell within $2,500 of the sale price. Across the 10 states studied, slightly more than 40% of transactions met this definition…
“The growing gap between home appraisals and actual sale prices underscores the challenges of providing accurate valuations in a rapidly appreciating market with limited inventory”, CSS CEO Ashley Jelinek said in a statement.”
- Accurate Appraisal Underreporting - July 24, 2024
- Uncovering Flaws in FHA Appraisal & Loan Review Process - July 15, 2024
- Exposing Predatory AMCs - June 14, 2024
I mean, housing wire is nothing more than a paid mouthpiece by every AMC article they have put out. What’s funny is if you were to run AVMs under that same requirement you would probably have a 90-95% fail rate.
So, this data could also include appraisals that are $3,000 or more than the purchase price? I’ve had a number of those the past few years where buyers were actually getting a good deal. Dang my inaccuracy!