Inflated Appraisals

flip_it_fast · #1 01-20-2009, 07:20 PM

Have any of you purchased a home, whether it was for a flip or to live in, and later found that the appraisal was inflated and you ended up paying a lot more for the house?

This has recently happened to my sister-in-law. She and her husband are buying a house and paying way more than it can possibly be worth.

Although it is too late for them to do anything about this, the Federal Housing Finance Agency is putting into place a new Home Valuation Code of Conduct which is supposed to begin in May. This is supposed to curb inflated home appraisals in the future. Good news for those looking to purchase a home in the future, too late for those who already have.

JaredfromIndiana · #2 01-20-2009, 07:49 PM

I would never look at an appraised value as actual value of a house. A realtor will be able to show you the value of a house based on a market analysis which includes comparable houses that have sold and expired.

My house was appraised at $105,000 and in all reality we could get $90,000 for it right now.

flip_it_fast · #3 01-21-2009, 02:10 AM

If you know that the appraisal has been inflated, is there anything you can do about it or are we simply stuck paying the price?

JaredfromIndiana · #4 01-21-2009, 02:51 AM

If they are in the process of buying the house and are going to pay much more than it's worth then they need to not buy it! Have they already bought it?

svmagnum · #5 01-21-2009, 04:41 AM

Isn't your mortgage specialist supposed to get appraisal for the mortgage? If so, then if he represents you then there is no need for him to do an inflated appraisal unless he acts for both of you. The buyer and the seller