Who exactly IS at fault when an appraisal comes to a less-than-desirable valuation? And what IS a home appraisal based on?
Appraisals are typically handled through a title company and appraisers are often selected from a network of appraisers with which the title company is affiliated. Theyíre an unaffiliated third party. Often times, thereís confusion because the homeowner is informed about the cost of the appraisal by the mortgage company/banker, when actually there is no mutually beneficial relationship.
So if an appraiser sets a value on your home that comes in too low to move forward with the home loan, the mortgage company nor the mortgage banker can benefit in any way.
So Who's to blame? Unfortunately thereís no real person to yell at. The current nationwide trend of decreasing home values is to blame. Right now, home values in some locations are appraising at 40% under the price at which they initially sold.