The word “appraisal” brings up different thoughts for different people. Love them or hate them an appraisal will be an integral part of real estate for the foreseeable future. So what is an appraisal you ask? An appraisal is an opinion of value. But not so plain or simple. The most common type of value sought is market value for lending purposes. That would be a value that one may expect to sell for if the property were placed for sale and allowed a sufficient exposure to the market. Sounds simple enough, right? It would be if there was a magic formula that allowed for your opinion, the appraiser’s opinion, and the lender’s opinion to be the same. The problem is they are an opinion and often people’s opinions differ. Since a “good” appraisal is rarely the topic of conversation, we will discuss the “bad” ones.

What makes an appraisal bad? There can be a variety of causes. There can be unrealistic expectations that cannot be supported by market data. An appraiser must have market data to back up their opinion of value. There can be a problem with the selection of the appraiser if they are not geographically competent. An appraiser must know the market well in order to provide a sound value opinion. In the shadows of the recession, it is evident that banks and mortgage lenders do not see this as important as very often they are looking for the lowest fee and fastest turn around time. And the cause can also be the lack of good quality market data where considerable subjective judgment must be utilized.

So if you have a problem or issue with an appraisal it is best to try to understand what the appraiser has to work with. Even though the sale of the house next door 5 years ago may effectively raise the appraised value for your house it is likely the lender will not allow its inclusion as it may not reflect current values. I would also encourage you to ask the lender, if for loan purposes, what experience the appraiser has in that particular market. Again, the appraiser should have solid geographic competence. Also look in the mirror and ask yourself if you really know the market better than the appraiser before calling an appraisal “bad”. Remember that influencing an appraiser to raise a value beyond what they feel can be supported by market data is ultimately not beneficial for any party involved. Sure it may make the deal work or make someone feel better but over-borrowing or under collateralizing can cause trouble down the road.

Appraising on Lake Burton and Lake Rabun require significant market knowledge and can be difficult. In fact, only a handful of appraisers are truly qualified to provide an accurate and reliable appraisal on our area lakes. Each property has many, many characteristics that add or subtract value. The appraiser should have a good idea of what dollar adjustments to make and for what characteristic. Since the lot value is typically a major contributor of value the appraiser should be knowledgeable of values for lots and what makes those values vary. Keep in mind the appraiser makes adjustments and views properties from the eyes of the average buyer. This means they arrive at the most likely value although other factors can affect a final price or value. Because of the complexities and required market knowledge, it is imperative that the appraiser has geographic competence in the Lake Rabun and Lake Burton area. Failing that you may receive an appraisal that does not accurately reflect the market.