“Bad Appraisals”: Red Flags Every Lender Should Look for…
As a certified appraiser with over a decade of experience in the Baltimore market, I've reviewed countless appraisal reports. While most are completed with care, some reports raise immediate concerns. Here's your guide to spotting potentially problematic appraisals before they impact your lending decisions.
Missing the Market Pulse: A quality appraisal reflects current market conditions. If comparable sales are all from 6+ months ago while more recent sales exist, that's a red flag. Here in Baltimore, where neighborhoods like Canton and Federal Hill can see significant price changes within months, outdated comps can seriously skew values.
The Comp Selection Puzzle: Be wary when comparable properties seem oddly chosen. If the subject property is a renovated rowhome in Fells Point, but the comps are from distant neighborhoods or significantly different property types, something's off. Good appraisers understand Baltimore's unique submarkets and select truly comparable properties.
Adjustments That Don't Add Up: Large or inconsistent adjustments without clear explanation should grab your attention. adjustments should be reasonable and consistant. There should be clear documentation explaining why an adjsutment is warranted. Not every difference requires an adjustment but, when applied, they should be reasonable, consistant, and supported.
Ignoring (or Mis-labeling") Property Condition: Baltimore's housing stock ranges from completely renovated to needs-total-rehab. When an appraisal glosses over significant condition issues – or fails to acknowledge major improvements – that's concerning. Detailed condition descriptions and photos should support any condition adjustments.
Superficial Market Analysis: Look for depth in the market analysis section. A quality report discusses local market trends, supply/demand factors, and neighborhood characteristics specific to Baltimore. Generic statements without local insight suggest limited market knowledge.
Missing or Vague Commentary: Professional appraisers explain their thinking. If adjustments, market conditions, or value conclusions lack supporting commentary, that's a problem. You should understand exactly how the appraiser arrived at their opinion of value.
Taking Action: If you spot these issues, don't hesitate to request clarification. A professional appraiser welcomes the opportunity to explain their analysis.
Want consistent, high-quality appraisals from someone who knows Baltimore inside and out? I'd love to join your approved panel. With over 1,000 appraisals completed across Maryland, I bring deep market knowledge and unwavering professional standards to every assignment.
Email me at info@Lendport.com to discuss adding me to your panel. Let's work together to ensure your lending decisions are based on rock-solid valuations.
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