Does it seem a bit suspect when the appraised value comes in at the sales price? Maybe you’ve felt that way before. Should you be concerned? Yes and no.
Yes. If the appraiser has deliberately met the sales price in an attempt to make the deal work, it is suspect and you should be concerned. If the house is really worth more or less, it’s not fair to have the appraisal hastily completed to help make a transaction move forward.
No. The sales price can be a good indication of market value. The agreement between a buyer and seller can very well reflect market value for a property and fall within the range of values in a neighborhood. If the buyer and seller (and others) offered on the property and all came in at a similar level close to the contract price, chances are that might be a pretty decent indication of how the market sees the property. For example, if the sales price was $225,000 and the range of values for competitive sales looks to be $220,000 to $230,000, and there is no good reason for the subject value to be reconciled at the higher or lower end of the range, then $225,000 could very well be a rational selection for market value. It is very reasonable for the appraiser to make such a conclusion and not suspect at all so long as there is support for that conclusion. In short, when the appraised value equals the sales price, the appraiser might just be saying, “Yep, that looks good based on all data. The buyer and seller did a good job working out a price.”
What do you think?
If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.