Profile picture for kbunting

Is there normally a big gap between RE agent valuation and Mortgage Lender home appraisal?

  • July 28 - Vero Beach
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Answers (8)

Profile picture for Cory Roberts
There will always be a difference in appraised value when 2 different parties are doing it. Even 2 different appraisers will almost always come up with different numbers when appraising a property. As a Realtor, I recently did a CMA for a client that was purchasing a property. The purchase price was $400k. I could not find comps to support anything over $375. The appraiser came ultimately in at $413k. I disagree with people on this post who suggest that Realtors inflate value in a CMA to obtain listings. As A Realtor, it does not pay to have an overpriced listing, so I believe the opposite is true. I believe Realtors will typically be more conservative with regard to value than most appraisers. The difference is most appraisers are more qualified to make "adjustments" on value as Realtors are typically not trained in this area. Also, it is very rare to see an appraiser give a higher value to the property than the sales price as they are under intense scrutiny regarding the values given. They can lose their job or license if they accidentally appraise a value too high but will not be subject to anything if they appraise a property too low. It is unfair, but that is the market we are in now.
  • July 28
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Profile picture for hpvanc
My experience is that CMAs tend to have a strong bias to the high side, so don't be surprised if an appraisal comes in at less than RE agent valuation.
  • July 28
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There is usually a difference between appraised vale and listing value. There are enough newer sales that give a good indication of value. In Ocala Fl the appraisals have been coming at or above contract price.
Ask your agent to  pull the current comparable sales before making an offer.
  • July 28
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There is almost always a gap between a Realtor's estimated value of a property and what it actually appraises for.

Yes the appraisal is what it would sell for if it sold...... the Realtor values it high to get the listing.........
  • July 28
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Hello,

There is almost always a gap between a Realtor's estimated value of a property and what it actually appraises for. A good Realtor will always be able to get their estimate really close, though. There are so many tools at our disposal nowadays that estimating a home's value has never been easier!
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Yes, there is often a gap between the mortgage appraisal and the contract price.  Mortgage Lender home appraisals must be based on previous sales while a real estate valuation will account for market conditions. Current market conditions in our area are improving so appraisals are often lagging behind actual contract and sale prices.   

In contrast in recent past years while the market inventory was rising and real estate sale prices were falling, asking prices were sometimes equal to or even below previous sale prices. 

However, be aware that real estate valuations are usually presented in a range from market value up to an  assertive asking price. Together the seller of the home and their Realtor adviser determine the marketing strategy.     
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Profile picture for wetdawgs
Both CMAs and appraisals are opinions.  The accuracy is quite dependent on the skill level of the person doing the evaluation.    I find that CMAs tend to be higher than appraisals.
  • July 28
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There should not be but there can be. An appraisal is simply ONE persons oppinion of value based off of comparable properties and overall condition of subject property. One person may view a home completely different than another. I'm sorry this is vague but the reality is there is no true accurate answer to this question as it is all based off oppinions.
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