Assessing agenda of each appraisal

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A 12 percent increase in home values in Fayette County? Let’s look at the facts regarding home valuations.

Each and every appraisal/valuation is subject to the purpose for which it is being done. In the past many appraisals were done to reap the highest value possible for the buyers, lenders, mortgage companies, etc.

This practice led to the eventual licensing of appraisers in most if not all U.S. states. As I said, the purpose for which it is being done still remains a controlling factor.

Case in point: Homeowner A had an appraisal in mid-April, 2017. The purpose was to remove the PMI (private mortgage insurance). Most lenders will remove PMI if the LTV (loan to value) is less than 80 percent. Based on the original purchase price, the LTV is at 73 percent.

Well, the lender says, “We need an appraisal because we believe it might not be worth that much now.”

Remember “the purpose for which it is being done.” Appraiser comes, does an outside inspection and an interior inspection and proves the lender’s point. Estimated value: $160,000.

But with new carpet, interior paint and some cosmetic repairs it would be worth $180,000. It’s an obvious “low ball” estimate for the lender.

Now we turn to the assessments. Again “the purpose for which it is being done.”

Same property. FMV (fair market value) is set at $144,950 for 2015. FMV is set at $165,150, 12.1 percent increase, for 2016. I will agree that value was in line with the property and the neighborhood.

For 2017, FMV is set at $198,550, a 16.8 percent increase. Unfortunately, there are no sales in the neighborhood to support that valuation.

Homeowner B: FMV is set at $176,450, an 8.2% increase for 2017. Recent appraisal set the FMV at $189,000. Insert the sound of crickets here.

No disrespect to appraisers nor the county assessors, but the bottom line is once again, “The purpose for which it is being done.”

Rodney E. Davis
Fayette County resident for over 34 years and still here