http://www.realestateappraisertips.info/ – Home Appraisers: Are Real Estate Agents Now Being Treated As Suspects Of Housing Collapse? Do Regulatory Agencies Believe That Real Estate Agents Partially Contributed To The Collapse Of The U.S. Housing Industry? The Answer Appears To Be Yes!
As a Home Appraiser of 18 Years, I recently attended the “Valuation 2009″ Appraisal Conference in New Orleans where FNMA, Freddie Mae, FHA, ASC, etc… were there. Out of 450 total in attendance, 300+/- of them were from the regulatory side….heavy brass was there. What they had to say, especially with FHA Reserves at 0.53% +/-, is that you you can expect more tightening and scrutiny of appraisals and lenders across the board. This is also why appraisals are only good for 4 months now.
What I heard at the Conference from a major AMC or the impression that I left with was that Real Estate Agents are being treated “suspectly”, meaning they didn’t encourage appraisers to ask for the Agent’s comps on a purchase appraisal. In fact, appraisers were told that if an Agent volunteers comps to the appraiser, to let the Agent know that you are an “advocate for the truth” and that’s verbatim……they know something about the Realty Industry that they were trying softly to communicate to appraisers.
I left with the impression that in some cases, they know some Realtors are listing homes for what the sellers want and not what the market will support. They know some Realtors don’t bother studying the actual market trend before listing a home, nor do they know how. They also know that some Realtors don’t bother to measure homes any more and simply copy the old MLS sheet or guess at the living area (when I see an MLS listing with 1600sf, 2400sf, 3000sf, I know the agent didn’t bother to measure the the home)…..yet they want their 6% commission +/-. On a $250,000 home, that’s $15,000. So, for $15,000, the owner doesn’t get their home actually physically measured? That’s A Shame! So is that disclaimer on the MLS Sheet stating “Measurements Not Warranted By Agent and/or Broker”. If you’re in a market where homes sell for $150/sf +, that can be a big deal. So, we have some agents out there wondering why their appraisal came in low? Re-read what I’ve stated above, about the appraiser being the one that actually measures the home and possibly finds a 200sf discrepancy in living area size…..and then the agent wonders why the appraisal came in low? YES, “the BRASS” is finally waking up to “some” of the agent habits. Notice, I did not say that all agents are like this, but some are.
By the way, it wasn’t HVCC that introduced the “Low Appraisals” issue; it was Fannie Mae’s 1004MC Market Conditions Addendum, which actually tells the real truth about a market…..along with the more technical software appraisers now use and wonder why agents billing 6% a home are not using??? Look at this chart below showing a -7.63% declining market since the following 1 year period. This chart represents an actual market where I recently performed a purchase appraisal that came in $9,000 short. Why You Ask? Because the agent failed to measure the home (it was actually 167sf smaller) and because the agent didn’t even have a remote clue that this market had dropped that much from 1 year ago. That too is sad!
FYI! Bill Cobb, Appraiser
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