Whether you are attempting to refinance, purchase or sale your home you should always be aware of what other homes in your neighborhood are currently LISTING for. While knowing exactly how much and under what conditions homes in your neighborhood have sold for is not necessary, it is fairly simple to find out what they are listing for. A quick search of your neighborhood on the HAR.com website will give you a list of all homes that are currently offered for sale. You can take it one step further and use other services such as Zillow.com or Trulia.com to search for active listings as well.

So why is this so important? One Word: Underwriting! When an appraisal is received by a lender it is sent through a process known as underwriting. During this process the underwriter reviews the appraisal and checks it for accuracy among other things. The underwriter’s job is to ensure that the appraisal does not have any obvious faults, especially the conclusion of value. One of the steps they will take is to look at what other, seemingly similar, homes are listing for within your neighborhood or market area. If the appraiser has appraised the property OVER what other homes are listing for, this will raise concern with the underwriter and possibly lead to the rejection of the appraisal Imagine paying for an appraisal only to have it deemed “unacceptable” by the lender!

A good appraiser will always include 1-2 Active Listings within the sale comparison on any appraisal assignment that is going through underwriting. This provides additional proof to the underwriter that property is indeed worth the estimated value that the appraiser has concluded.

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