That’s because your lender needs an objective assessment of the property’s value before they’ll agree to give you a loan.
Who does the appraiser work for?
The appraisal process isn’t simple and it becomes even more complex in New York City. That’s because there are so many variables.
Two similar apartments located in buildings just a block apart can have very different values, depending upon the floor they’re located on, the views they offer, the physical condition of the unit, the financial condition of the building, the building’s maintenance fees, even the lighting in the unit.
Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm based in New York, says the most important thing for buyers to know about the process is this:
The appraiser works for the bank, not for you.
“Lenders, especially these days, are looking for reasons not to lend,” said Miller. “Appraisers are the eyes and ears of the transaction. When you think about it, the appraiser is the only one who doesn’t get paid based on whether or not the loan closes. The appraiser is there to provide an unbiased opinion about whether the property is worth what the buyer has offered to pay.”
What if you get a 'bad' appraisal?
Miller said buyers sometimes find themselves in the frustrating position of having an appraisal performed by someone who’s unfamiliar with the neighborhood.
“If you believe the data provided by the appraiser, who drove into the city from three hours away, is off the mark, there is virtually nothing you can do to have that appraisal removed,” he said. “You may convince the bank to order a second appraisal, but they will not ignore the first number – not ever. They may average the two appraisals but they will never disregard the first appraisal altogether.”
His advice? Don’t waste your time fighting an unwinnable battle.
“Go to another bank, no matter where you are in the process, and try your luck there,” Miller said. “It’s unfortunate, but it’s really the buyer’s best option.”
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