When it comes to a car, there’s virtually nowhere for its value in the market to go but down. By the sixth year of ownership, a brand new $30,000 sedan would have dropped in value by nearly a third. Houses, on the other hand, are different; depending on factors like the state of the real estate market, its value can either swing up or down.
Residents find it difficult to price their home as high as possible due to the sheer investment in home improvements for it to look appealing to an appraiser. Nevertheless, even with a thorough appraisal, it won’t guarantee a good price, especially before closing. This results in an “under-appraisal,” a real estate phenomenon common in both the U.S. and Canada.
With tools such as the Multiple Listing Service® (MLS), under-appraisals should’ve been relegated to history. The MLS® is as accurate as a buyer or seller will get as far as local real estate prices are concerned, being a hodgepodge of homes for sale. While it’s not good for an appraiser to give a low value, so is the homeowner asking for a higher, unreasonable one.
Every group in the real estate market has tons of data to rely on to reduce the frequency of an under-appraisal. The appraiser has the right to give a low price for your house, given that he can justify reasons for this outcome. However, you also have the right to ask for a review of the appraisal, given the same conditions.