Brokers know something that appraisers don’t

Past just isn’t precedent when it comes to appraisals. (Flickr photo by -Georg-)

If you seek to borrow money from an institutional lender such as a bank to purchase your new home, you can be sure of at least two things: mounds of completed paperwork and a visit by an appraiser to your intended property.

It is the appraiser’s job to determine whether the apartment or single-family house provides enough collateral to back up the loan in the event of default.  As we all know, when the value declines below the value of the loan, the homeowner is said to be underwater, owing more than the property is worth.

That’s not a happy situation either for the lender or the owner.

Appraisers note