“The value of properties is one of the most frustrating things I’ve faced in my business; a lot of times clients engage in bidding wars and in many cases the offer comes in and it is well above the appraisal value,” Christine Xu of Mortgage Architects
told MortgageBrokerNews.ca. “Many people are over-paying for homes.”
Several industry players have complained about, what they believe to be, outdated and inaccurate appraisals and have called for a reform that will take into account other valuations when deciding the value of a home.
“Appraisals aren’t coming in at the proper value; they’re not coming in at purchase price,” Anthony Ambrosio of CSI Mortgages told MortgageBrokerNews.ca in mid-June. “The appraisers look at market data that is old – they’re always looking backward and not forward.”
According to Ambrosio, homes he is having appraised now are being valued at winter prices, when the market was slower and prices were lower.
But it isn’t the inaccuracy of the appraisals that is the issue, according to Xu. It’s the dearth of housing supply that is causing inflated prices.
“Because of the hype of the market people in the hot areas, people want to buy properties and there aren’t too many available,” Xu said. “Once a property becomes available there are many buyers interested in purchasing it.”
Multiple bids ensure homes in many hot markets sell within ten days, according to Xu.
“Many people are over-paying for properties.”
Brokers are once again venting their frustration with the discrepancy between appraisal prices and sale prices of homes; though it isn’t the appraisers’ fault, according to one broker.