You may have heard that Andrew Cuomo, New York’s Attorney General has filed a lawsuit against First American Corp., an appraisal company, saying that First American Corp. assigned inflated values to homes all over the country. These inflated home values led some people to pay too much for homes, while others borrowed a lot more than they normally would have to purchase overpriced homes.
The suit accuses First American of bowing to pressure from a lender when inflating the value of some homes. Although New York State is not suing the lender, the implication is that the higher appraisals allowed the lender to make loans in higher amounts and benefit from the increase in business.
So what methods do appraisers use to evaluate a property?
Appraisers gather information from a variety of sources and weigh each piece of data. Some of the information, such as county courthouse records and data from a local Multiple Listing Service, is formal, while some of it is informal. An appraiser may also use personal knowledge and speak with real estate professionals and homeowners in the area.
Ask your appraiser just how they come up with a value for your home. Depending on the service you request, an appraiser may enter the home or base their estimation on viewing the outside and consulting other source.
You are allowed more than one appraisal, so do not feel that you are locked into a figure if you have doubts about an appraiser’s work.