Before I got into this post I'd like to say upfront I do not blame appraisers.  This is yet another symptom of the overall problem that is making the problem worse...kind of like an illness in which you contract a secondary infection.

There is an extreme amount of pressure on the appraisal industry.  There has been an attack on appraisers by the banking industry...the industry they serve. 

New rules implemented earlier this year (HVCC) have made it much harder to make a living as an appraiser.  There has been a push towards using AMCs (Appraisal Management Companies) to order appraisals.  AMCs don't seem to be worried about quality...they hire the appraisers who will work for cheap. (Many AMCs are reportedly owned by banks ie Bank of America and Landsafe) Appraisers who used to make several hundred dollars for an appraisal, money well earned, have found their fees roughly cut in half by these middle man companies who now pocket the rest.

As a result, appraisers now have to work on volume to survive.  When you have to do twice as many appraisals to make the same amount of money...what happens to quality?  In addition, many appraisers have to work larger areas to survive.  This is, many times, leading to out-of-area appraisers who are not familiar with a particular market, being hired to appraise a property.

As if this were not enough...appraisers are now being hit with lawsuits by banks for appraisals they did years ago (that they likely made less than $400 on to start with!!!).  Banks who are looking to pass the responsibility on to someone else. 

We have now seen two Jacksonville real estate appraisals in a row come in at 20% or more below our contract price.

This has happened not on straight resales, but on Jacksonville short sale properties, priced low to start with, that had already been approved by the seller's banks.

If the appraisal problems can not be worked through, these are Jacksonville homeowners who will end up with a foreclosure unnecessarily.  And all because of eye-popping low appraisals that are not accurate. 

The big losers in this are the seller (who may end up in foreclosure), the buyer (who is getting a great property for a good price), the Condo or HOA Association (who we are getting a full payoff for in the deal), the neighbors in the Condo/HOA(who will see their own value go down dramatically further overnight), the seller's lienholder (who will be misled into thinking the property is worth less than it really is and suffer a larger loss than necessary) and the whole community (since this will likely be used later as a comp for another sale).

Who is the winner here?