Real Estate Topics Forum :: View topic - mistake on appraisal -

janbogus@aol.com · Guest

I purchased a home in April 2005 and received the appraisal after the closing. There were two mistakes on the appraisal - hardwood floors listed instead of carpet and storm windows when there are no storm windows.

I am moving out of state and want to sell my property. How much do these factors generally decrease the value of a house? (Since purchase I have had a paved driveway and six larger trees removed.)

nemmar · Site Admin

If you carefully scrutinize any written appraisal report you can always find something that is either incorrect or inaccurate. Unfortunately, it's like any other profession where people are behind schedule or backed up with work or other things on their mind and they don't always concentrate 100% on what they're doing. People make mistakes since no one is perfect.

What you need to be concerned about is if the mistake on the written appraisal will have a negative effect on the market value estimate of the report. For example, there are many, many factors that must be evaluated to accurately estimate the market value of real estate. However, appraising is NOT an exact science! A real estate appraiser gives an ESTIMATE of the market value of the subject property in their written report, it's not an exact amount that the real estate is worth. The reason it's called an estimate of market value is that no two buyers are identical in their interests, tastes, financial situation, motives for purchasing the property, etc. That is why according to appraisal standards that if two appraisers do an appraisal on the SAME property, then if their market value estimate is different by up to 10% of the value on the report, then BOTH appraisers are still considered to have done an accurate appraisal report - as long as they haven't made mistakes in their reports that will effect the market value of the property.

So in your situation I would not worry at all about the hardwood floors and storm windows mistakes made by the appraiser in April 2005. Because the buyers for your house are not going to use the appraisal from April 2005. The new potential buyers for your house will have a new appraiser come to the property sent by the mortgage lender they use. When that appraiser arrives, then you can tell him/her to make sure they pay close attention to the details of your property so they don't make the same mistake that the April 2005 appraiser made.

The mistake of hardwood floors on your appraisal actually increased your property market value estimate (probably by just a little) because it is more appealing to the typical buyer to have hardwood floors rather then carpeting. Hardwood floors are expensive to install and if you have hardwood floors you can put carpeting over them without a big expense. However, if you have carpeting then often the floors underneath are NOT hardwood, but plywood which is cheaper construction and much less appealing then hardwood floors.

The mistake on the storm windows is the same situation. The appraiser stated the you DO have storm windows which would increase (slightly) the market value of your house. Since you have no storm windows then that has less appeal then a house with storm windows installed.