“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. “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.
“Look at prices in February compared to now; we’re getting valued at February and March prices even though the market has gone up,” He said. “When August rolls around they will be looking at Spring prices.”
It’s a problem a number of brokers across Canada have had to deal with and one particular player is noticing certain appraisals are especially under-valued.
“The appraisers don’t care, they often undervalue by 20-30 thousand dollars; they are quoting down from the market, especially when it’s an insured-referred appraiser,” Avijit Ghatak of Centum Home Loan Inc. told MortgageBrokerNews.ca. “I have chatted with the insurers and they don’t discuss it with us. They say they only go by the appraisers and not the market or the Realtors (but they should) go by the market and listing as well as what the appraiser says and do an average.”
Ghatak believes benchmarking against similar homes – currently listed – as well as recently sold homes is a good way to get a better glimpse of a home’s true worth.
Brokers who are frustrated by outdated and inaccurate appraisals are calling for a reform that will take into account other valuations when deciding the value of a home.