Market value remains a centrally important metric (measure) to real estate investors, mortgage lenders, and homebuyers. Only the foolish would buy, sell, or loan against a property without knowledge of its market value. Nevertheless, hundreds of bank failures and millions of foreclosures has laid bare the idea that this popularly relied upon figure should serve as the only figure that matters.
Never again should anyone believe the once-entrenched view, “Buy for less than market value, you've scored a good deal. Pay more than market value, you've overpaid.”
Never again should anyone rely upon appraisers (without question) to provide accurate, disinterested estimates of market value. Although always known among real estate insiders, the market value estimates of appraisers are not only subject to unintentional errors of fact, interpretation, or both, in many instances, appraisers manipulate their numbers to deliver whatever value estimate makes a deal work (at least, that is, appear to work—in the short run.)
So, this chapter will help you in two ways: