Mortgage Companies are asking appraisers to use foreclosures in their appraisals. How does your home measure up?

The property market across the United States of America is going through tough times. Not only is there a phenomenal demand slump but also a notable prevalence in the foreclosures and short sales, resulting in mortgage companies asking home appraisers to use foreclosures at the time of their appraisals. Another important aspect is that the banks and other lending institutions are looking at ways to curb risks and approve loans strictly on the basis of the borrower's payback ability. Hence, the role of appraisers is becoming more important than ever.

In the wake of the rising foreclosures, mortgage companies are no longer showing any interest in houses that do not match up to the loan amounts taken while purchasing them. As a result, appraisals are becoming more stringent and sales prices are being monitored quite closely.

The general perception is that homeowners undergoing a foreclosure have a better prospect of exact valuation of their property. Many also feel that foreclosed deals are often used for making a comparison between different homes. This however may not be entirely true. Although, the real estate market has become a foreclosure driven market of late it is wrong to assume that valuation of a property is made solely based on this one aspect. A number of other factors count when it comes to gauging the value of a property. These may include assessment of the value of the vicinity, area and the city/town before coming to a conclusion.

While a number of factors definitely come into play while assessing the value of a property, it is also true that predominance of foreclosures have a certain impact on the value of the property. If in case your area is becoming full of foreclosures, you have to be prepared that such a trend would influence the valuation of your property. This is because such a pattern provides a generalized overview of your area or vicinity.

Another serious concern is whether the houses adjoining yours are foreclosed upon or appear run down. A negative impression can have a bad effect on the market perception regarding your property. It is thus always an advantage to be on a safe distance from the foreclosed areas. This is because the appraiser will evaluate your property using non foreclosure sales which will be acceptable to the lender or mortgage company as well.

However the sad thing is that due to the deepening of the global economic recession banks and other lending institutions are pressurizing the appraisers to report negatively about a particular area. Initially, they inflated the property value but now they are making sure that the property market is at the lowest value. This is adversely affecting the property market and as a result prices are plunging drastically.

As a homeowner/home seller you need to ensure that you do not let your property to be evaluated in an unfair manner. Upon receiving the appraisal report, you should review it thoroughly and voice your grievances if you do not agree with certain points in the document.