Builders blame appraisals for low sales
A survey of builders finds low-ball appraisals deep-six one-third of sales contracts
The National Association of Home Builders blames record-low home sales and a delayed economic recovery on the appraisal industry.
One in three residential builders lost a signed sales contract in the last six months because appraisals on their homes were less than the contract price, an association survey of members showed.
The group blamed "the inappropriate use of distressed and foreclosed sales as comparables in determining new home values" for the situation.
A full 60 percent of respondents reported they were experiencing appraisals coming in below their contract sales price, and 53 percent said the appraisal amount was actually less than the cost of building the home.
Another association survey showed modest signs of improvement in scattered housing markets where employment is gaining and distressed properties are not as numerous.