Comments on: Appraisal Institute to Yun- Not the Fault of the Appraisal but a Fault of the Market Today

By: Bob

Bob — Sat, 25 Jul 2009 17:49:28 +0000

I would suggest that if lenders are ok with the present situation with the outsourcing of appraiser selection to the AMCs, then they be required to use this system for the valuation in the short sale process (no more rookie agents doing worthless BPOs for $50). The lien holder would outsource the appraisal assignment to the AMC. The appraisal would then be accessible to the buyer’s lender. If the appraisal becomes outdated, a new one is done. This would streamline the appraisal process for the short sale.

If an offer comes in higher than the current appraised value on record, then a 2nd appraisal could be done. This works to the benefit of the buyer and the lien holder to arrive at market value.

This way the appraisal works honestly for both principles and and lien holders. This only hurts the bottom feeding short sale flipper.

The AMCs would be required to assign appraisals based on geographic location. No more appraisers from LA in San Diego, as they would be assigned local work in LA. The fee is initially paid by the short sale lender and reimbursed by the buyer at closing. Exceptions would be where dictated differently with govvie loans. Same money out of pocket for the buyer and the appraiser would see 75% of the fee.

Apply this to REOs and you wont have discounted distressed sales skewing the stats. Under this scenario, a comp is a comp. The market then rises or falls based on supply and demand, not artificial leverage.

By: d

Mon, 06 Jul 2009 21:31:57 +0000

To Ken Montville – The MD Suburbs of DC
It’s not the appraisers who set “market value”. It’s the buyers and sellers in that neighborhood.

How do I know that’s the case? I am an appraiser. I own a home the market values in the low 220,000’s. If I set the market, guess what? I would have sold that home for a cool million a long time ago.

Try to think before you speak. Or write. Many people have found it useful every time.
Live long and prosper!

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Mon, 06 Jul 2009 19:07:59 +0000

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By: Ken Montville - The MD Suburbs of DC

Ken Montville - The MD Suburbs of DC — Wed, 01 Jul 2009 11:44:45 +0000

I’m a little late to this party but what I see happening here is what has been happening and has happened even during the “boom times” of the 2000-2005 era. Appraisers just do not want to take responsibility for “the market” or their work. During the “boom years” appraisers blamed their inflated appraisals on coercion from the lending industry (”Get me this value or you’ll never work in this town again!”). Now, they’re still the “friend” of the lending industry by protecting it from lending more than the house is worth.

Yeah, right.

I recently had an FHA appraisal from an appraiser who lived 3 miles (not 30) away from the subject property. Ostensibly, he knew the market. Ostensibly, he knew area market trends and could pick out reasonable comps. Instead he came in $4,000 less than a $216,000 sales price (.0185%). I cannot believe anyone — appraiser, Realtor — can be that accurate.

Buyers are low balling sellers because “Now, it’s my turn”. I think the same mindset has taken hold in the appraisal community. They are seeking their revenge against other real estate professionals (mortgage companies, Realtors) for supposedly making their life miserable during the “boom years”.

I get the same response from appraisers I follow on Twitter that Ben Goheen and the Institute make — “It’s the market”. Who, if not the appraisers, determine “market value”? Yes, real, live human beings, in the person of appraisers, set “market value”. Please, let’s stop making up stories about how some invisible force (God???) create market conditions.

By: Jeff Israel

Jeff Israel — Mon, 29 Jun 2009 18:40:20 +0000

I agree with what Joe and John point out. I have a somewhat objective opinion since I am not a real estate agent or an appraiser. From where I sit at the MLS level, we can track statistics on the broader market very accurately. In our area, prices have mostly returned to the pre-real estate market meltdown levels. REO’s and short sales reflect what a bank is willing to unload a property for and not what the housing market should rightly bear. An appraisal using these comps will undoubtedly be lower than actual market conditions and an unfair representation of real market value. Perhaps appraisals using short sales should be further reviewed and qualified. Put an * on it!

By: Joe Loomer

Joe Loomer — Mon, 29 Jun 2009 17:07:39 +0000

There needs to be a formal redress procedure in place – other than the “appraisal review” – to correct some of these appraisal issues. In a relatively stable area (price wise), we’re still seeing lower appraisals and contracts failing because of these appraisals. The agent certainly does have a duty – as Paul points out – to educate their client about the market conditions – but it is more often than not an appraisal done late in the game and including reo comps that screws the pooch. Agents are sometime to blame, as are Appraisers, but Appraisers can literally mess up EVERYONE’S day. And not only becuase of their valuation…..

Navy Chief, Navy Pride

By: Daily Digest for 2009-06-28 | Joe Spake - Memphis Real Estate

Daily Digest for 2009-06-28 | Joe Spake - Memphis Real Estate — Mon, 29 Jun 2009 07:45:32 +0000

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