Eric Schwartz has been a real-estate appraiser for 28 years and has been based in the D.C. area for eight. He also serves on the national board of the Appraisal Institute. The Examiner recently asked him how the turmoil in the housing market has changed appraisals in the region.
Foreclosures in the D.C. area are low compared with most other large metropolitan areas, but they’re still up six-fold from last year. Are they having an affect on appraisals here?
Yeah, they will. Any appraiser worth his or her salt is going to know how many foreclosures are listed per sale in the neighborhood and they’re going to know how they’re affecting the prices. … The more foreclosures there are on the market, the more they push down prices. But irrational fears of foreclosures should never be the guiding stimuli to make or not make a purchase. I wouldn’t be scared if there are a few foreclosures listed in the neighborhood.
In the analysis of how the market got to this point, there has been a lot of talk about appraisers receiving pressure from lenders to inflate the value of a home.
I have found it to be true. A lot of it comes from mortgage brokers — they want artificially high values because if the value comes in higher, the loan brokers do a larger loan. The mortgage broker is paid out of commission. … Hopefully, the situation is being taken care of right now with the laws on the books in the Senate and in the House.
What are the simplest ways sellers can raise their home values?
Paint the exterior or wash the mold off the vinyl siding. On the interior, keep the walls clean and repaint them every few years. If you have vinyl flooring and it gets nicked or cut, that’s something to take care of. If you have a dishwasher or water heater that goes out, get it fixed or replaced.
