Appraisals are useless in the 2013 Los Angeles Real Estate Market
Theoretically an appraisal is supposed to represent the current market value for a piece of residential real estate. If you look at a standard appraisal done on the Fannie Mae form 1004 an appraiser will use 3 different methods to determine value: Cost Approach, Income Approach and the Sales Comparison Approach. In the Residential market the value typically used is the Sales Comparison Approach, meaning the appraiser uses prices of comparable properties (similar age, square footage, lot size, condition, amenities, neighborhood, sold within last 6 mos within a 1 mile radius).
Becasue HVCC appraisers are using past sales (typically distressed) to determine value of a property with…
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