Appraisal Nightmares, part 2
Monday, July 6th, 2009
In case you didn’t get enough on the new appraisal guidelines, a couple of well respected writers and real estate gurus put their thoughts on the subject matter out there for review this weekend.
Check out Gary London’s commentary, “Appraisers Going “Light” on Home Values” in the July 6th edition of the San Diego Business Journal. And, Kenneth R. Harney, nationally syndicated real estate writer with the Washington Post, for his story published July 4th, “New Appraisal Rules Under Fire“.
Both writers explain the problems with the new “Home Valuation Code of Conduct” (HVCC), including issues with appraiser competence, additional costs for the home buyer and pressure on pricing due to bad appraisals. As with most reactionary regulations, the “cure is worse than the disease”. Is it too much to ask for our regulators to understand the impact of their actions BEFORE they force them down our throats? The damage caused by such “cures” are often times greater than the damage the regulators were trying to protect us against. Such is the case with the HVCC and it is now time for a “cure for the cure”!
Thanks, Steve, for continuing to write about this issue. We at Big Builder have been sounding the alarm on this problem even when the issue was deemed overblown by even some of the most visible and respected writers at papers like The Wall Street Journal and Herald-Tribune. You can check out our latest work on the subject here: http://www.bigbuilderonline.com/Industry-news.asp?articleID=1017399
Thanks again for speaking out on the issue; it’s only when leaders such as yourself raise the question can there be any solution.
Thanks Sarah,
Great story! I agree, we need to keep pushing the word out there about this appraisal debacle. We are in the middle of another appraisal problem, as I write this comment. Ignoring more current closings and all upgrades, an appraiser came back with a value $12,900 under our contract price. While reviewing the detail of his appraisal I noticed an error in his stated “most relied upon comp” that caused an $18,000 negative adjustment. We have gone back to the AMC (a week ago) and we are still waiting for the appraiser’s response. Meanwhile, the buyer is stuck in limbo!
Please, keep pushing the word out there. Maybe someone will get the hint!
Steve