I have been pretty proud of myself lately.  I had gotten scores back from relocation appraisals, as all of us who do relocation work do.  My worst score in the last 24 months was a 7.41.  That means that the house I appraised for a relocation company sold for a price that was 7.41% different than what I said it would sell for.  Any score under 5% is considered good.  Scores from 5-10% are mediocre in the eyes of a relocation company.  Anything over that is unacceptable.

I appraised a house in the Village at Fishers Landing at the end of last March.  It is a 20 year old house in good condition.  The neighborhood is very popular and the properties are well maintained.   I appraised the house at $390,000.

Coincidentally, I got the assignment to appraise the house when it sold in the early part of May.  It had sold for $405,000.  When I went to the house for the second appraisal inspection the owner quizzed me about the first appraisal.  How could I have been so low???  The other appraiser (relocation companies always get at least two appraisals) had concluded $410,000 in their relocation appraisal.

I did my best to answer the questions.  The house had sold for 3.85% more than my appraisal had suggested it would sell for.

I did the appraisal and forgot all about it; until yesterday that is.  I received my score from the relocation company.  My score was 22.83.  Remember, anything over five is not good.  Anything over ten is terrible.

Oh my!!!!  What happened???

As it turns out, the sale of the house in May fell through.  I don’t know why.  Probably the borrower just did not qualify for the financing.  Then the house went back on the market.

The listing, which had been about $415,000 went down to $405,000 in May.  In June it went down to $400,000.  In July it went down to $375,000.  In September it was reduced to $350,000.  And, it finally sold in October for $320,000.

Wow!!!!!!!

The market in that area of town had been strong for months before my March relocation appraisal.  I played it strictly by the numbers.  If the May sale had closed, I’d have gotten a good score.  With that sale-fail, I got the worst score I have ever gotten.

And, in this environment, loan officers will call asking why my appraisal is so low on this or that.

I wonder who’s minding the mint??

Ralph Olsen, IFA

Pacific West Appraisal Services, Inc.

pwas.net