Best at Analyzing Comps: A Realtor, Investor, or Appraiser?

[Jason Grote]

I am curious as to what fellow investors think about who is the most qualified to analyze comparable sales. I understand that Realtors and Appraisers are the ones with legitimate access to the MLS, but if you had to pick between a Realtor, an investor, or an appraiser, which do you think will hit closest to the mark for an investment property that you are analyzing? This is assuming all are equally seasoned and experienced.

[Mark Ferguson]

I'm a Realtor and think I am better at values than appraisers, but that doesn't mean all Realtors are better than appraisers. The reason I think I am better is because I constantly see low appraisals come in on my own and other houses over and over. I am not saying this is the appraisers fault, but they are limited to how they can create their report. They must put all their weight on sold comps and therefore by definition have a hard time coming up with high values in a sellers market.

I have had homes with multiple offers that came in above what the appraiser decided a home was worth. his justification is there are no sold comps to support the value. You look at the comps and they are all 6 months old! If my market is appreciating 20% a year of course he is going to come in low using old sold comparables. They appraiser usually does into consideration there is only one other homes for sale in the neighborhood that is under contract and it went under contract in 2 days.

If an appraiser must use sold comps, how can they ever justify rising prices unless they use cash sales that did not require an appraisal? The problem is the highest sales involve loans most of the time and require appraisals.

This is not one isolated case from one appraiser, but many cases form multiple appraisers and I here similar stories all over the country from other agents. On my refinances my values have been 10 to 15 percent low because appraisers are afraid to come in anywhere close to high due to all the fraud a few years ago.

I think appraisers are more educated and many times more qualified, but bound by laws and lender requirements that prevent accurate values.