For about a year, houses sold in local markets across the nation were running into appraisal issues.  Real estate agents often comped (or priced) the property at one amount, but when the appraiser came in they thought it should be valued at significantly less amount.

We’re starting to see fewer lost transactions due to appraisal issues as real estate agents and appraisers are coming closer to their price opinions.

In addition, other parties to transactions outside of the appraisers duties are stepping up to reevaluate the value of real estate.  If the home is a VA sale, the agents have the right to send supporting documentation to demonstrate why the price can be comped higher.  The documents may include recently sold real estate outside the immediate area of the home listed, thanks to the 2003 Tidewater Initiative.

The Tidewater Initiative gives a point of contact the opportunity to challenge an appraisal if the appraiser notifies them that the appraisal will come in under the sales price.  The appraiser can not disclose that appraised amount and the contact person has two business days to provide additional sales information to support the sales price.

However, this initiative doesn’t always kick in as real estate agents face the new reality of home values just not being as high as they were two and three years ago.

That said, it’s still shocking ot hear about a two thousand square foot house selling for $140,000 when just months ago it could have sold for $180,000 and up.