The sub-prime mortgage meltdown has brought lots of new rules that affect the way we buy or refinance real estate. One of the changes is an increased focus on appraisal quality. Gone are the days when just about any appraisal with 3 sales in the last year or so was a good enough. To prepare an appraisal that will past the new underwriting guidelines an appraiser must be more than just licensed, they need to be well trained, experienced and know the market. At a minimum appraisal reports now include information about the total number of sales, absorption rates, listing and sales price trends, average days on market and other statistical data that reflects the activity over the past 12 months. While appraisals still include at least 3 sales, the new rules require at least two must be within the past 90 days and more often than not appraisals may have to include as many as six comparables to be acceptable.
The new challenges are complicated by the HVCC. Because HVCC has promoted the selection of the lowest fee and fastest turn time many of the best appraisers have left the business or have quit working with lenders. As a result, when the appraiser assigned to do your appraisal calls it is someone you have never heard of. Often these are newly certified appraisers or appraisers from different markets.
So if you end up in this situation these are some tips to help you avoid appraiser shock?
1. Meet the appraiser at the property and be sure the person inspecting the property is the appraiser assigned to do the appraisal. 2. Bring a list of features of the home including any updating or special amenities.
3. Bring a floor plan of the property if you have one.
4. Bring copies of the contract, the legal description or survey and the home inspection.
5. Bring copies of any MLS sheets for recently closed sales that are comparable and support the value.
Yes it is the appraiser’s job to find all the things listed above but remember it is the agent’s job to do whatever it takes to get the deal closed and closed on time. Remember there is a difference between providing information and improperly influencing the appraiser. Don’t bring just the highest sales; bring sales that are really comparable.