Quick question: What is a property worth? Answer: What someone is willing to pay for it. That answer is truthful, but it doesn’t always end up being “correct.” That’s because few people pay cash for real estate. When you borrow money the lender is going to protect their interests by ordering an appraisal.
They will contact a licensed appraiser who will examine the property, compare it to nearby similar properties for sale or that have been sold, and will prepare a report that reflects his or her opinion of value. Although it is an opinion, it carries weight with the lender. In fact the lender will almost completely disregard what the buyer is willing to pay for the property if the appraiser has a different opinion.
This makes the appraiser an important piece of the puzzle. And it’s a piece over which you have no control. I was in this business when we could still choose an appraiser and I watched them get pressured into justifying higher prices than should have been reasonable. Since the collapse of 2008 and the passage of Dodd-Frank, appraisers are now selected from a blind pool by the lender and no one in the process is allowed to pressure or influence the appraiser. Although this system has its flaws, it’s probably better than the previous.
So you’re going to have an appraiser and this piece is outside your control. It would be a good idea if you knew what an appraiser was thinking before you BOUGHT the property right? That’s what we are going to do for you today. We are going to help you get inside the mind of an appraiser.
Scott Murphy is joining us in a few minutes. Mr. Murphy has been appraising real estate since 1985. In 1993 he earned his SRA designation from the Appraisal Institute – a credential earned by less than 1% of the appraiser population.
In 1996 he established D. S. Murphy & Associates and has grown the firm to have over 70 associates – servicing Georgia, North Carolina, South Carolina, Tennessee, Florida and California.
In 2004, Mr. Murphy was appointed by Gov Perdue to the Georgia Real Estate Appraisers Board where he is actively working to improve the laws and more closely regulate appraisers in Georgia. He has served as the Chairman of the Georgia Real Estate Appraisers Board for the past four years.
He is an active member of the Appraisal Institute, the National Associates of Realtors, the Northeast Metro Atlanta Board of Realtors and the Georgia Real Estate Fraud Prevention and Awareness Coalition.
Also coming up – it might be getting harder for your buyers to get a loan. And I have unbelievable news about recent home sales. They are both up AND down. I’ll have the coverage and explain shortly. And folks this is as close as we get to genuine hilarity in the world of real estate so decide now you’re just going to laugh about it with me.
And Ben Carson is working on affordable housing. I’ll have that story today also.
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Guest: Scott Murphy
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Expected Air Date: 8/11/19