Appraisal Organization Defends Assignments
The average driving distance for an independent appraiser retained by the nation’s largest appraisal management companies is 13 miles in urban and suburban areas this year, according to a survey conducted by the Title/Appraisal Vendor Management Association.
Appraisal management companies currently provide approximately 60 percent of all residential appraisals used in the mortgage industry, the trade organization says. It conducted the survey to dispute the contention that appraisal management companies routinely use out-of-town appraisers who don’t know the territory, said Jeff Schurman, executive director of the organization.
Schurman says blaming the industry for low appraisals is wrong. Industry standards require that appraisers be assigned to territories with which they are familiar. If they aren’t, they are obligated to refuse the assignment, he says.
Source: Title/Appraisal Vendor Management Association (11/11/2009)
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Tips for Getting a Good Appraisal
Appraisals can be tricky these days. Here’s some advice from Maureen Sweeney, a Chicago-area owner of an appraisal firm, on getting an accurate and fair appraisal.
* Both the real estate practitioner and the owner should be present for the appraisal and follow the appraiser around. Make sure he doesn’t miss anything important.
* Ask questions to determine if the appraiser has identified the correct neighborhood boundaries and if she’s comparing the home to similar properties.
* Bring a copy of a recent tax bill and a survey of the property, and give them to the appraiser.
* Provide a list of improvements to the home.
* Offer your professional opinion about what makes this property worth more than other properties in the area.
Source: Chicago Tribune, Mary Umberger
Faulty Appraisals Harming Housing and the Economy
Twenty-six percent of builders are seeing signed sales contracts fall through the cracks because appraisals on their homes are coming in below the contract sales price, according to a nationwide survey conducted by NAHB.
“Home builders are increasingly concerned that inappropriate appraisal practices are needlessly driving down home values. This, in turn, is slowing new home sales, causing more workers to lose their jobs and putting a drag on the economic recovery,” said NAHB Chairman Joe Robson.
The survey showed that nearly 60% of the builders are reporting that inadequate appraisals are causing serious problems in the market, with the biggest problem being comparables of new single-family homes that are too often based on foreclosures and distressed sales.
“Lost home sales are killing jobs, deepening the housing slump and hurting local economic activity,” said Robson, who noted that construction of 100 single-family homes generates 324 local jobs, $21.1 million in local income and $2.2 million in taxes and other revenue for local governments in the first year.
Of those who are reporting appraisal problems, 54% said that the appraisal amount was actually less than the cost of building the home. Full Story.
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