Orlando Real Estate Sales & Over Cautious Appraisers

Orlando Real Estate Sales Affected by Over Cautious Appraisers

With the Orlando Real Estate market on the rise, appreciation has become an actual piece of the puzzle again. It’s very common these days for a property to receive several offers on it for thousands above the asking price, specifically in the more desirable neighborhoods. Unfortunately, appraisers don’t really care about offers that are submitted above asking price and will rarely appraise any Orlando property above that property’s listing price. Instead, they just go by the listing price and try and get as close as they can to it.

However, this doesn’t stop a potential home buyer from submitting a contract on a property for well above the listing price especially on Orlando short sales. The big problem with that is, if the house doesn’t appraise for the contract price, then the bank won’t finance the deal. At this point there are three things that can happen.

  1. The buyer will have to come up with the extra funds to make up the difference between contract price and appraisal value to the closing.
  2. The buyer will have to change their offer to whatever the appraisal came in at and hope that the seller accepts it.
  3. The deal falls apart because the seller refuses the lower offer and chooses to hold out for a bigger payday.

Any way you choose to look at it, appraisals are directly affecting Orlando real estate sales. It’s true that some appraisers are over cautious and are appraising Orlando properties for even less than what they should be.

John CondeGuest blogger: John Conde, Real Estate Agent, Short Sale Specialist, Real estate Investor, Orlando Realty Consultants



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9 Responses

  1. Avatar appraiser says:

    Thank you for a very uneducated look at what appraisers do. We report to the client what the current real estate market reveals. Multiple offers on a listing does play a role in the anaylsis, but does not automatically make the home’s market value, as defined by the appraisal, equal to the highest offer if that value is not supportable by other recent sales and market trends. Appraisers do not care what a property’s value turns out to be, we report the market activity and trends to the client and they make a lending desicion based on that. Your bias idea of what a property should be worth versus what the actual market shows a property “should be worth” as defined by market value may be the same or far apart. Either way, the appraiser, if doing an accurate job, will show the lender what the market says, not value a property low to be cautious as you suggest.

    • Avatar John says:

      Sounds like I struck a nerve. The truth does that…

      • Kevin Keck Kevin Keck says:

        So are these people offering their own money or are they offering an investors money? I have a feeling the investor would highly disagree with you in over paying for a piece of property. I guess you have forgotten we just had an economic crash due to a housing bubble perpetuated by over zealous agents and loan officers looking to make the deal. But i’m sure you Biased opinion on the value matter doesnt violate any USPAP principles. People are allowed to pay what ever they please on a property, but when you involve money that is not theirs, it has to be based on empirical data. And its sad your response to a well thought out response was an very typical “Comeback” of someone with no real evidence or support for their rational. Just complaining that there job isnt the easy money street that you think it should be. But you have no problem with putting peoples future finances at risk as long as you make a buck today.

  2. Avatar Danielle says:

    Is this article on AppraisersBlogs to show the problem with the mentality of commissions-driven Agents? If so, it was very successful.

  3. Avatar Jen says:

    Great post! and soo true, there are some pretty bad appraisers out there that have no business being appraisers. They’re just interested in getting paid doing the leaset amount of work possible. as an experienced broker i run into these guys a lot.

    Thanks for speaking up about it!

  4. Avatar Ed Rothstein says:

    Unfortunately, appraisers are now gun shy because they played a big hand in the housing collapse in 2007 and a bunch of them got into hot water with the law. These days they appraise properties lower than they should just to cover themselves. We’ve run accross this situation many times and we’ve had to get 2nd appraisals done in order to get deals closed.

  5. Baggins Baggins says:

    Buyers can offer whatever they want.

    Until a cash contribution is made, lenders won’t loan over recent indicators of common value.

    If Realtors would get more cash contributions, this would raise the proverbial value bar.

    Buyers who are advised by Realtors to offer over listing price, should also be advised to do so only if they have the cash to cover the difference.

    Otherwise the Realtor is playing inflationary games with peoples largest investments, and that’s unethical behavior. The appraisers who kill these accelerated pricing deals, are the good guys.

    If the home is worthy more, people should be willing to pay more. And if they dont’ have cash in the first place, perhaps they should tone down their expectations.

  6. Avatar Paul Schuster says:


    How is it that you can blame appraisers?

    As you know, the mortgage lending market as well as Wall Street and the banking system has recently nearly collapsed. This near collapse was formed by the creation of new B & C loan clients as well as the mortgage resale markets, and the greedy securitization of resold mortgage paper.

    That folks think they may want to pay more for a distressed in a particular area listing is fine.

    With regard to this, an appraiser providing a good appraisal report must rely on facts. Not just list prices, and not just exuberant bids on list prices.

    I don’t appraise in the Orlando market, so I cannot tell you if any data within market area would support the opinions of what appear to be exuberant buyers.

    As you may, or may not know, it’s very difficult to come up with a supportable, defendable estimate of a real time time adjustment using data from the past 12 months.

    Facts as to recent sale prices are one type of data; List prices as well as List Prices being bid up in a market period such as the one we find ourselves in, are quite a different and rather nebulous form of market data.

    If you want to complain about people being low balled in their Real Estate Lending Transactions, you might complain about the B & C Mortgage Paper market created post 9/11/2001, the Mortgage Resale market, along with greedy Wall Street securitization of Mortgage Paper whose recent actions have low balled not only the Lending Markets but the Economy as a whole.

    It appears that Appraisers have become more diligent in these trying economic conditions.

    We can only hope that form of respect for the market ‘trickles up’ to those who make deals with other peoples paper.


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Orlando Real Estate Sales & Over Cautious Appraisers

by AppraisersBlogs time to read: 1 min