Plummeting property prices … it cannot happen to me!
New Yorkers are aware that property condition is bad but until and unless they directly indulge in a property sale or refinance process, reality is not as clearly visible. Only when a property appraiser comes out with an appraisal report, severity of the situation is understood. The values of properties have fallen dramatically and owners are just unable to digest this sharp decline. Findings are terribly bothering. Now the real question is, is the situation actually this bad or there is some kind of a major flaw in the calculation technique deployed by the appraiser?
Answer could be yes or no!
Property prices have dipped and thus it is possible that the appraiser might have conducted a diligent appraisal exercise and the results are close to accurate. However, there is another possibility. The appraisal process might not actually be accurate enough. It has been noted that often, for the appraisal purposes, appraisers rely upon recently completed sales in vicinity. The approach works, but the properties need to be cautiously selected and this is often not the case.
Recently, property owners in Brooklyn contacted us with an appraisal query. They wanted to refinance and the financing company had designated an appraiser to conduct the evaluation exercise. The estimated cost was pathetically low and now the owners wanted a second opinion to reconfirm the findings. During the reappraisal, our Brooklyn appraisers realized that in the initial appraisal exercise, the properties which were used for comparison were not actually comparable. They were in the same area, but then the properties were in different conditions; the other ones were old constructions. Fresh appraisal proceedings were initiated, more data was collated and the new results presented the accurate picture.