Reply #3: As a former real estate agent [View All]

[WatchWhatISay]

my opinion is that if the bank thinks the loan applicant looks good, it will appraise for whatever it needs to. If the applicant looks risky, it probably won't. This manipulation of appraisals shares a big part of the responsiblity for the crisis we are in now. Remember who orders and pays for the appraisal. If the house doesn't appraise, the sale, as well as the loan, are likely to fall through and nobody gets paid except the appraiser - not the mortgage company, the Realtor or the Seller.

I have refinanced my house twice and both times the appraisal value came in at just what was needed for an 80 and 70% loan to value ratio. As an agent, in most cases I witnessed appraisals coming in at just exactly the contract sales price and not a penny more. Only rarely did an appraisal come in over the contract sales price, and I believe that is because some times it can cause the the owner to have "sellers remorse" (did I sell too low? should I try to get out of the contract?)