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New Rules, New Solutions for Real Estate August 19, 2009

Posted by John Watch in AccuriZ News, News Feed.
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Agents and Brokers, new rules and solutions are apparent in Real Estate. The news about Lenders and the appraisal industry has recently captured headlines. Trust in the appraisal is an issue for everyone involved. But providing the Appraiser with statistical reports on property data from a third party source is a strong selling point to your client. You have the right to do so, and the appraiser must accept it. Here’s how.

1. Provide a list of sales in the area that have occurred for the past 18 months acquired from property data and public records (yes the banks want the last 6 months, but this is a guideline, not actual law). Sales data and property data can be acquired HERE.

2. Investigate each sale and write up what you can about the sale and its property data.  Larger, better condition;  foreclosed, poor condition etc.  The appraiser MUST make and explain adjustments, so if you point them out and the appraiser ignores them then you have recourse.

3. Calculate the Sale Price Per Square Foot.  It’s a simple calculation: sale price divided by house square footage.  And check the square footage because public records can be outdated and incorrect.  Providing this information allows you to examine the local market and property data based on a common denominator and express a level of knowledge about the market.

Why do you do this? 

The appraiser, MUST ACCEPT the property data under USPAP and the appraiser must then add it to their appraisal file as a source record. Also, the property owner is entitled to a copy of the report.

This information should be presented to the appraiser with a letter stating that this research is provided from public record sources reflecting the property data listed by the local assessor.  What this does for the borrower, seller or buyer is create a trail that information was provided. If the property data is not used, the appraiser then must explain why.

Appraisers are not the bad guys; but the less experienced ones are just looking to get in and out as quickly as possible.  They’re focused on filling out the form versus doing the analysis. 

In my 25 years of appraising, I have seen this pattern repeat itself over and over.  Fees do not reflect the actual analysis that should be completed and appraisers tend to be cheap.  As more companies provide statistical reports that the appraisers can use more than once, some of these issues will be resolved. 

Unfortunately the issue of Bad Appraisals is a problem that should have been resolved 20 years ago with FIRREA, but it was left unregulated with few State Appraisal Boards putting the teeth into enforcement.

Let us know how we can help you provide the reports for your clients.  Third party reports and validation, which are easily accessible and verified on the Internet, cannot be dismissed as the broker or real estate agent trying to influence the appraiser. We just need to adjust to the new way of conducting business.

Please provide us with your feedback on this matter!  We want to know what the public thinks about this!

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Comments»

1. motels - September 3, 2009

Good guides .Thanks a lot.


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