Home Valuation Code of Conduct
May 7th, 2009 categories: For Buyers, For Sellers, Rants & Riffs
As of May 1, 2009, new rules have been put in place to try to curb pressure on appraisers to arrive at higher values for properties. With all the issues arising from the sub-prime mortgage mess, at first blush, it sounds like a really good idea. However, like most things done by the Government, this appears to be taking a shotgun to kill a fly. CNBC reports the following.
“But don’t talk to an appraiser or a mortgage broker about it, or you’ll get an earful. Most of them claim it was crammed down the collective throat of Fannie and Freddie by the very powerful Mr. Cuomo, and that it puts good solid appraisers out of business, complicates the loan process for mortgage brokers, and inevitably hurts consumers.”
CLICK HERE TO READ THE CNBC POST
Here is the reality. By not allowing communication with an appraiser, the new rules are hurting consumers. There is no absolute market value for a particular Honolulu home or condominium, there is an upper and lower range of value. If an appraiser is not familiar with an area or if their value cannot be questioned, then low appraisals could end up blowing perfectly good sales. Most sales are subject to the buyer and property qualifying for the financing, so if the appraisal leads to a cancellation of a sale the majority of buyers should be able to cancel the sale and have their deposit returned. But the buyer will have spent money on a professional inspection ($300-$500), appraisal ($500) and other fees associated with the process of buying a home. Upon cancellation these fees will not be returned. Add to this the emotional cost of falling in love with a home and the three to four weeks to find out that the appraisal went badly, and I think there needs to be modifications made to the Home Valuation Code of Conduct.
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If you would like to discuss your real estate needs, feel free to call me at 808-737-2093 or toll free at 877-737-2093. You can email me at keahi@lava.net.
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The swinging pendulum of regulation-hopefully the middle ground will be established and buyers and sellers can get on with “their” transaction.
i love this blog.. thanks for sharing..