How to Cope with the New Rules for Appraisals
December 10th, 2009 Categories: Real Estate Tools
You may not be aware of the new appraisal requirements for a home purchase and how they’ve impacted the residential real estate market over the last few months. As a result of the new HVCC federal requirements, when a buyer applies for a loan to purchase a particular property, the appraiser for property must be chosen by a third-party appraisal service. In many instances, the appraiser assigned to the property is from outside the area and has no firsthand knowledge of the market being appraised. Those of us who live and breathe residential real estate are well aware of the adverse effects this process can produce for both buyers and sellers, and how much more difficult it can make a successful close of escrow. One of the key problems is the lack of knowledge these outside appraisers have on local residential markets. This brings into question: who really understands the true value of a home? Is it the experienced real estate agent, the buyer making the offer, or the appraiser crunching numbers based solely on statistics, who has never seen comparable properties? Does the appraiser know how to take into account the condition of the property, whether it’s been recently remodeled, the amount of flat land, the views, or the better location? If you knew that when you bought or sold a home after May 1 of this year that your real estate agent was not allowed to speak to the appraiser, wouldn’t you be concerned? Isn’t it important for our professions to be working together and sharing important information about the market and home values? I’ve seen a number of deals fall through lately — at the last minute — because an appraiser who usually works in the Valley or Orange County turned in an appraised valuation that was far off the escrow sale price. As you can imagine, this can cause a deal to fall apart. As professionals we were all on the same team until this change came along — make your concerns heard! CAR is supporting legislation that would put an 18-month moratorium on this new procedure, and I encourage you to contact your local legislators and ask them to do the same. Here’s to all of our success! Read the rest of the story at the Valerie Fitzgerald Group. The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business.
