“You Get What You Pay For”
The Boston Globe Magazine has an interesting piece on appraisers. The article encourages consumers to closely monitor the appraisal process.
While this is not a horrible idea, there is a fine line between asking an appraiser to consider new information and pressuring that appraiser to reach a predetermined value.
The article also includes this section on the Home Valuation Code of Conduct.
Under the new guidelines, appraisal management companies (AMCs) will act as middlemen between mortgage companies and appraisers and hold greater influence over the entire process. “We think it’s going to hurt the quality,” says Peter Vadala, president of the Massachusetts Board of Real Estate Appraisers. “These AMCs put pressure on the appraisers to do two things: Do an appraisal cheap and do an appraisal quickly.”
The National Association of Mortgage Brokers filed a lawsuit against the Federal Housing Finance Agency in late February, arguing that proper contact among mortgage brokers, lenders, and appraisers helps ensure high-quality, cost-effective, efficient appraisals. Appraisal firms like Newton-based Lipof Real Estate Services make a similar case. “The essence of the [new code of conduct] was doing good,” says company president Rick Lipof. “It was to take the pressure and intimidation off the appraisers.” But for appraisal management companies, he says, “the goal isn’t to find the most competent appraiser to make sure the value is right. The companies look for the appraiser who can turn it around in a day for the cheapest price. What do you think you get for that? You get what you pay for.”
Lenders and consumers want appraisals that are fast, cheap and accurate. Appraisers can accomplish two of those qualities, but never three.
National Association of REALTORS®
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