Why Appraisals Become More Challenging in a Slowing Market
Posted by Hank Miller on
Appraisals become more challenging in slowing markets, and that was clear across the Greater Atlanta region over the last two years. As '26 opens, the market is likely to remain stable as the balanced market continues. Given that, it's prudent for buyers, sellers, and agents to understand the challenges inherent in appraising homes in slowing markets. The most obvious thing is for all parties - particularly agents - to acknowledge the market; price the home accurately based upon the data. There's no mystery around this, but it's also the foundation of the majority of appraisal issues.
To add to the mix, Fannie Mae and Freddie Mac are introducing the new UAD 3.6 format alongside the current one. The new format will be mandatory beginning Nov '26. An…
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certain to be on the radar of all is the appraiser; sometimes an ally, sometimes an enemy. More on Karen later...
are significant differences between an appraisal and a home inspection, it’s best for every home buyer to become familiar with the purpose of each. In fact, some real estate agents would also benefit from a reminder about their respective roles.
The great Atlanta real estate market adjustment of 2022 is upon us. As everything shifts, the main players are whispering around the water cooler...will low appraisals be a problem now? Probably not a bad question as the changes in quarter 2 of 2022 were dramatic. As the Fed fights rampant inflation, buyers are faced with dramatic rate increases and sellers with a comparative lack of activity. Lenders and appraisers are also impacted; both industries are circling the wagons just a bit tighter as everyone waits for this market to settle.
Is it wise for buyers to waive the appraisal contingency? Appraisals continue to cause agita among many in the home buying process. Is the answer to eliminate it? Current offers reflect the “current” market (listings/pendings) while appraisals reflect the “past” market (solds). This is an inherent conflict especially in a transitional market. When inventory is tight and seller markets exist, the "cleanest" contracts get the most attention. Cash buyers can obviously waive the appraisal contingency completely. Buyers with mortgages must have an appraisal, but there are ways to ease a seller's mind even when an appraisal is required.