Long-Term Real Estate Appreciation Often Conceals Short-Term Volatility

Over the long term, home values in the United States can be counted upon mostly to rise. With very few exceptions, a family that buys a home will be able to count on selling it for more ten or twenty years later. That fact is a cornerstone of the American dream, where buying and paying off a home is a way of attaining greater financial security.

Over shorter spans of time, though, home prices tend to fluctuate quite a bit. Appreciation is still the most common fact of life in the world of housing, but brief periods of decline are also far from rare. For most homeowners, this does not need to matter much, because this short-term volatility has no real long-term impact.

For others, however, it is of much greater import. Banks and mortgage companies, for example, have to be keenly aware of these details, or they might risk granting loans that fluctuating valuations will quickly undermine. That means that these institutions generally have to stay on top of short-term house values in a way that homeowners themselves do not.

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That could be a tall order if they were forced to go it alone. Fortunately, banks are able to rely on the nation’s independent home appraisers for these needs, a network of professionals that numbers in the tens of thousands. By working with a capable appraisal company, a bank can easily arrange for up-to-minute appraisals of properties that accurately account for short-term conditions.

In addition to absolving banks of the responsibility for keeping up with such issues, an Appraisal Management Company will bring other advantages to the table, too. Because it is an independent second-party working with equally independent third-party appraisers, an AMC like The Appraisal Hub also injects some valuable objectivity into the process. This allows bank loan officers to make better judgments about which borrowers and properties are worthy of the resources belonging to their institutions.

A service of this kind can also make it easier to get a second opinion when circumstances call for one. Most such companies maintain large rosters of active appraisers and are able to call on any of them as needed. That means that a bank or other lender can easily request that another appraisal can be conducted and can be sure that will get done quickly and with diligence. Although short-term housing values may be somewhat unpredictable, then, there are good ways of getting a handle on them for those who have a need to do so.

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