How much is your house worth?
As of July 30th, 2009 new regulations that are designed to protect home buyers will go into affect. We have already seen changes in the way appraisals are performed, under the new Home Valuation Code of Conduct (HVCC). Appraisers are shielded from “undue influence”, meaning that Realtors, Sellers, Buyers, Lenders or anyone else associated with the sale can not provide any assistance to the appraiser.
In the past, I would always attend the appraisal of the home I had listed as a courtesy to the Seller and Buyer. I would come prepared with comparable sales in the market, a survey of the home, a copy of the contract, and any other information I had to support the sales price of the home. The appraiser and I would have a discussion about the upgrades to the subject property, time on the market and other issues that would be considered important to the appraisal.
Lenders would generally select the appraiser from a list of approved appraisers, especially those who are familiar with the area in which the appraisal was being performed. As of May, 2009, Lenders or Mortgage Companies cannot select the appraiser. There is a middle man, a company who selects the appraiser from an approved list, regardless if the appraisers company is in West Palm Beach, Fort Lauderdale or Miami. Very often I attend appraisals where the appraiser has never been in the neighborhood and knows nothing about the intrinsic value of the community. I am not allowed to give any information to the appraiser, unless asked, and therefore my position as the professional real estate agent is basically considered unimportant to the final result of the appraisal.
While I do believe that this Code of Conduct was designed to protect a buyer, I also feel that there are too many restrictions being placed upon appraisers today.
In my next blog I will talk about the July 30th Housing and Economic Recovery Act (HERA) and the Homeownership and Equity Protection Act (HOPEA) will affect the time it will take to close a loan.