I'm Pretty Sure This is how Appraisals are Performed Now
Posted by Ryan Ward on Tuesday, November 17th, 2009 at 9:30pm.
If this isn't how they are done, it might be obtained by taking a sledgehammer and hitting one of those strongman devices you find at a carnival that has been altered to show prices.
I don't know that I blame appraisers. It's a difficult task when you are trying to appraise a property in an area that you are unfamiliar with. Because of HVCC, we find ourselves in a new era where appraisers are being asked to perform a job for less money than ever before and simultaneously perform fewer appraisals because of the reduction in sales volume. A good portion of the income that appraisers used to make is now taken by the Appraisal Management Companies. What this is really about is how the Federal Government has caused greater harm with it's solution than they ever anticipated. The unintended consequences of HVCC may actually be hurting the real estate market more than helping by further pressuring prices down.
There is a Petition to Reverse HVCC
Take a minute, follow this link, watch the short video and maybe sign a petition to help permanently reverse HVCC. It's quite interesting.
The only entity who benefits from low appraisals are banks. Now, I want to be clear; I am not a bank-hater. There are plenty of people who think they deserve everything they get, but, I am not one of them. Banks are eating more bad loans from people who very well may have committed mortgage fraud with their "stated" income loans and the other things going on like short sales, etc...I appreciate lenders wanting safe loans, but, I think this may be unfairly padding extra equity that does not belong to them.
If I'm not mistaken, I believe that FHA loans will not permit money from an appraisal to be paid to an appraisal management company beginning January 1st and that is a step in the right direction. If an appraiser is only getting $125-$150 of a $450 appraisal and they are the one doing all the work, something is wrong. HVCC is an attempt to correct a part of the lending process that may have been corrupted sometimes by loan officers pushing appraisers to find a value in a home that didn't exist, but, this was an extreme solution. It would have been much better to require mortgage brokers and lenders to be state licensed the way we as real estate agents and brokers are licensed. This would be more effective than HVCC in correcting the original problem and would not have the negative impact on the housing market. For those naive enough to believe that there is no negative effect due to HVCC, licensing would still do a better job than HVCC could ever do.
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Premier Atlanta Real Estate
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Share13 Responses to "I'm Pretty Sure This is how Appraisals are Performed Now"
[...]I'm Pretty Sure This is how Appraisals are Performed Now[...]
Posted on Wednesday, November 18th, 2009 at 8:59 PM.
Ryan, You talk about requiring "mortgage brokers and lenders to be state licensed", and I would have to agree. By making them state licensable, you've brought the control down one notch closer to the local level. And on the local level, it's easier to see the problems and handle them with more finesse than HVCC ever could.
Posted on Thursday, November 19th, 2009 at 6:15 PM.
Its seems like these days property appraisals are just conducted in a very random manner. There needs to be some kind of guidelines.
Posted on Monday, November 23rd, 2009 at 8:31 AM.
The best way to help yourself right now, until this gets straighten out, is to provide the appraiser with the com's. This really helps. The agent should meet the appraiser at the property to let them in and review the market with them and provide com’s. If you don't it is at your own peril.
Posted on Monday, November 23rd, 2009 at 9:45 PM.
I agree, property appraisals are so arbitrary and inconsistent. Overruling or tweaking the HVCC might be a wise move.
Posted on Saturday, November 28th, 2009 at 8:27 PM.
The problem we're running into is that some appraisals are taking almost 3 weeks to get back, (and the banks want deals done in 30 days on REO's). This is killing us. We have no communitcation with the appraiser, so nobody knows when he/she is going to have the appraisal done. I've sent comps to appraisers a few times this year, and it has helped. But something needs to be done about this situation.
Posted on Thursday, December 10th, 2009 at 10:46 AM.
The days of a 30 day closing are pretty much gone. It's really up in the air when you submit your appraisal request through HVCC about how quickly it will actually get done. You brought up the management companies taking pretty much the majority of the cost and putting it into their pockets. These people have families to feed and businesses to run what a great way to handle this situation. More government control whoopee!
Posted on Sunday, December 13th, 2009 at 7:32 PM.
Ryan I like the post. To Dylan Darling, I agree 100%. To some it all up in a nutshell, Realtors I have less and less control of the real estate transaction compared to what we had 5 years ago.
Posted on Sunday, December 20th, 2009 at 10:22 PM.
There needs to be some kind of guidelines. kemer
Posted on Sunday, January 10th, 2010 at 1:30 PM.
We had a situation where the buyer's lender required two appraisals due to the property being a flip where the investor had owned the property less than 90 days. Not unusual in our market at the time and fortunately something that isn't required anymore. Both appraisals where run though an appraisal management company with one appraiser being assigned the job from outside the area. The result was astounding. The appraisal from the appraiser that didn't have experience in the local area came in 15% less than the one that came from an appraiser with experience in the area. Need less to say the buyer canceled due to their lender not granting the mortgage, the home went back on the market and the buyer was out the cost of 2 appraisals and a home inspection.
Posted on Thursday, January 28th, 2010 at 10:21 PM.
That's sooo funny, but true. It's even more crazy when you are getting an appraisal for a rehad/hard money loan. They are really off the wall.
Posted on Thursday, March 18th, 2010 at 2:08 PM.
As an appraiser I have seen low appraisals from out of area appraisers and even done a second appraisal in the same town on a few occasions. My results were closer to expectations, but I find people asking me if prices are going up. Although at a slower rate, they are declining. 1004MC surveys market conditions. I use time adjustments for each appraisal based upon data from each town. Regionally the average is -5.6% per S & P?Case- Schiller. Unless you live in a bubble, everyone, including lenders, knows this. Also, keep in mind that recent sales are given the most weight and require less time adjutments. Despite the market, there are usually plenty of sales and pending listings in northern NJ anyway. Using a regional bank with a salaried appraisal department is a solution. They can order appraisals from local appraisers. Guidelines for appraisers are voluminous, and with 1004MC and HVCC, along with USPAP and more, a challenge to remember for the inexperienced appraiser. I am alos a broker and can tell you that the appraiser is the most heavily regulated and litigated are of real estate. USPAP is an inch thick. How many pages is the Realtor's Code of Ethics. I am a realtor and I know the answer to that one due to mandatrory continuing ed. (which is 28 hours every 2 years for appraisers).
Posted on Tuesday, April 13th, 2010 at 6:43 PM.
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[...]on Internet buyers, but watch out it will crash your Firefox browser, works fine in Chrome. 8 ) I am pretty sure this is how appraisals are performed now – We recently had one house, two appraisals, two different appraisers and the valued were 24%[...]
Posted on Wednesday, November 18th, 2009 at 8:20 AM.