The collapse of the economy began with a reality wind blowing against the sub-prime mortgage house of cards. We are all living with the results of over-aggressive lending practices and over active government intervention. The following article takes us through Get yourself prepared for knowing estate appraisals New York.
The rationale for the invention and widespread use of AVMs was lower cost and greater speed that a traditional human generated appraisal. This is reasonable provided that the AVM product does indeed deliver this. There is no question that AVMs are much faster. They generate a report in a matter of seconds. But as in every other form of computation, the old axiom of "garbage in garbage out" applies and the sales information used by AVMs is often scattered or unreliable.
An AVM would not be suitable in the case where the subject home is customized. That is it located in an area with considerable variation, where the home is in a level of condition. AVMs have their place in the real estate industry but so do humans and AVMs have been cited as a good reason to get rid of traditional appraisals.
The government decided that the best way to deal with this was to flood the banks that created the problem with money. Illogically they assumed that institutions that had not acted in their shareholders best interest would now suddenly change, even former Chairman Greenspan was amazed at the bank's duplicity. The Bank's did exactly as you would expect anyone in a tough financial place that got bailed out - they covered themselves.
Along with the value-added critique is the notion that when an evaluation comes in at or above the sale price of a home, the appraiser is not telling the reader anything he or she does not already know, and since appraisals so often do come in at or above the sale price, they are not necessary. This is a false concept and can be demonstrated by a simple analogy.
An appraiser has to cover all out of pocket expenses the same as any business person (education, health insurance, MLS fees, liability fees, business insurance, state fees - the list goes on). In addition a good appraiser may spend anywhere from 3 to 6 hours in preparation (looking for comparable, etc.), have a 45 minute or more drive time to location, 2 hours driving comparable and taking pictures and then another 1 -3 hours writing the report and then if the bank wants more info or kicks anything back they have to invest the time to answer questions, etc.
Also, is they get your request from another appraiser or one of these new rips off government created middlemen called AMCs - they may have to split the fee. These are all just the costs of doing business. So when someone stops by for 30 to 60 minutes with a tape measure know that it's the tip of the iceberg and you're getting a good deal.
As the traffic cop, the assessment is a filter that things pass through to weed out problems. The advent of a large number of assessments coming in below sales prices tells us that something is wrong in the markets and that the system is not working. Chaos is developing, or perhaps hyperinflation is causing prices to accelerate too rapidly. The assessments are telling us things are out of control.
The rationale for the invention and widespread use of AVMs was lower cost and greater speed that a traditional human generated appraisal. This is reasonable provided that the AVM product does indeed deliver this. There is no question that AVMs are much faster. They generate a report in a matter of seconds. But as in every other form of computation, the old axiom of "garbage in garbage out" applies and the sales information used by AVMs is often scattered or unreliable.
An AVM would not be suitable in the case where the subject home is customized. That is it located in an area with considerable variation, where the home is in a level of condition. AVMs have their place in the real estate industry but so do humans and AVMs have been cited as a good reason to get rid of traditional appraisals.
The government decided that the best way to deal with this was to flood the banks that created the problem with money. Illogically they assumed that institutions that had not acted in their shareholders best interest would now suddenly change, even former Chairman Greenspan was amazed at the bank's duplicity. The Bank's did exactly as you would expect anyone in a tough financial place that got bailed out - they covered themselves.
Along with the value-added critique is the notion that when an evaluation comes in at or above the sale price of a home, the appraiser is not telling the reader anything he or she does not already know, and since appraisals so often do come in at or above the sale price, they are not necessary. This is a false concept and can be demonstrated by a simple analogy.
An appraiser has to cover all out of pocket expenses the same as any business person (education, health insurance, MLS fees, liability fees, business insurance, state fees - the list goes on). In addition a good appraiser may spend anywhere from 3 to 6 hours in preparation (looking for comparable, etc.), have a 45 minute or more drive time to location, 2 hours driving comparable and taking pictures and then another 1 -3 hours writing the report and then if the bank wants more info or kicks anything back they have to invest the time to answer questions, etc.
Also, is they get your request from another appraiser or one of these new rips off government created middlemen called AMCs - they may have to split the fee. These are all just the costs of doing business. So when someone stops by for 30 to 60 minutes with a tape measure know that it's the tip of the iceberg and you're getting a good deal.
As the traffic cop, the assessment is a filter that things pass through to weed out problems. The advent of a large number of assessments coming in below sales prices tells us that something is wrong in the markets and that the system is not working. Chaos is developing, or perhaps hyperinflation is causing prices to accelerate too rapidly. The assessments are telling us things are out of control.
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