Appraisal issues are one thing creating problems. I have seen more and more deals fall apart because the house wont appraise at the sales price.

There are probably a lot of people who believe that appraisers have a certain amount of legitimate discretion as to where an appraised value can come in, but that’s really not the case. An appraisal is supposed to call it straight down the middle, not favoring one side or the other. An appraisal that does otherwise is substandard and should be considered by all to be intolerable.

What appraisers can do is to play the odds as to what a lender will accept. When times are good and the lenders don’t care, the appraisers can abuse the lax level of oversight and review and submit overvalued appraisals. When the lenders look more closely then even the most crooked appraisers have to clean their acts up.

Agreed that in a declining market the appraisals not being met is a big factor in failing escrows. Also what I had happen earlier in the spring when the market was declining but rates were moving up fast was that buyers that tried to float the rate got caught and even if the home appraised they couldn’t get the loan. That bummed me out because the buyers agent misled me in that case about how solid the buyer was, yada yada. I even talked to the loan officer as well. Finally other reasons for falling out of escrow are the usual suspects… disclosures may have been made but the buyers due diligence uncovers additional problems that the two parties cannot agree to resolve. I had another escrow last year where the buyer was an agent for a condo in PB. We told this guy that this is an AS IS sale and that in our estimation there was about 25k in rehab work to be done. So after haggling over the price, on day 16 the agent calls me and tried to strongarm my client for that 25k… Even though we specifically told him up front of the entire situation and what our stance would be. I asked him prior to acceptance to make sure he was okay with this stuff and to not waste our time and bail out at the last minute. Nonetheless he did. He even told me he didn’t find out anything new with his inspections that we didn’t disclose, that he just “had second thoughts”.

Anyways things happen and it is all part of the job. So yeah PS pending doesn’t gaurantee anything. I know what the next question is, and my answer is yes there is a way to trace the listing history to see how many properties fell out of pending status but it is a VERY manual job. Definitely a chore to do.

Is it true that after July 1st that you cannot use 2005 appraisals? Thanks

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