Industry NewsTechnology

The numbers game in real estate values

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Recently, one of my listings did not appraise. Actually, it never even got an appraisal because the lender decided that it wasn't worth the expense after viewing the results of a computer-generated report. It was a questionable business practice on the lender's part and one that I hope I never see again. The computer-generated valuation used properties that are two miles from the subject property, and most were foreclosures. The data came from a neighborhood where property values are significantly lower. The report generated an estimated value that is 146.8 percent less than what the buyers offered. As a result, the lender is not ordering a full appraisal because it has decided that the value of the home is so much lower than what the buyers offered that an appraisal isn't worth the expense. There is another lender that is willing to take this on, but the buyers won't change lenders. To further complicate matters, the lender referred the buyers to their current agent. ...