What Las Vegas Realtors Have To Say About Low-Ball Appraisals
Even though the real estate market received
a 77% increase in Las Vegas homes sales this year, some Las Vegas Realtors are saying that the low-ball appraisals are
repressing sales. Realtors argue that some appraisals are much lower than they
should be and those kinds of appraisals are killing sales. But appraisers
contend that their prices are based on the current state of the Las Vegas homes market.
According to Mark Stark, Owner of
Prudential Americana, the appraisers are more focused on projecting what the
values will be instead of what they really are. He also said that the
appraisers are being very conservative and that they are trying to cover
themselves.
What happens is that those who have bought
Las Vegas homes, for example,
say $300,000, and are now selling it for $200,000. If the appraisals came in at
$205,000 that would force the seller to cut down the price or the buyer will
have to fill up the remaining $15,000 to make up for the difference since the
banks would only loan up to the appraised value. As a result, the owners of the
house will decline to sell the house rather than cut their price down by
$15,000. Stark said that this is affecting 20-25% of the sales.
Julie Burkart, an Appraiser with Southwest
Appraisal Services in Las Vegas, said that everyone is surprised by the decline
in values and suggested that the drop is not caused by appraisers trying to
cover themselves but by the data that they are basing their decisions with.
But according to Mark Madsen,
communications director for Raintree Mortgage Services, there are some
appraisers who purposely give low appraisals so that they could continue
working. This issue of low-ball appraisals caused concern to homebuilders,
saying that it has cost them to lose appreciable profit on Las Vegas Homes for Sale.
However, these low-ball appraisals don’t
have the same effect on Las Vegas
foreclosures because the banks don’t have an emotional attachment
to a property. This, in turn have created some problems for some buyers who bid
over the list price for bank-owned Las Vegas homes, only to lose out to someone who may
have offered less, but was willing to pay cash.