Released: September 23, 2007

High appraisals signal change

Source: Kenneth Harney, Washington Post (Free Registration)

What’s going on with appraisals? In some parts of the country, mortgage lenders—and appraisers themselves—say they’re increasingly coming in with valuations higher than the contract prices agreed to by sellers and buyers.

Are some sellers giving in to lowball offers, fearful that they can do no better because of the subprime mortgage implosion and home-sales bust? Or are appraisers simply lagging behind downward market adjustments?

“We’re seeing it a lot now,” said Patrice Yamato, president of Plaza Mortgage Group in Jacksonville, Fla. “Appraisals are coming in higher than the contract”—a reversal of the pattern during the housing boom, when appraisals often came in at or occasionally below the contract price.

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