Carver Communications - Index

Carver Communications - 6.1.09 - Index

June 1, 2009 REAL ESTATE NEWSLINE 11
The following is a summary of questions
that were presented in a meeting sponsored
by the Women's Council of Realtors.
Travis Kessler, President of the San
Antonio Board of Realtors made the following
statement: "In today’s market –
Appraisers are being held to a higher standard.
Now more than ever, buyers want to
make sure the house they are buying will
appraise for the value they are offering to
buy it. Sellers don’t want to have to take
money to closing and Lenders want to make
sure that the property which they are financing
has and will retain value. They are all
looking to the expertise of an Appraiser to
be a critical part of the transaction.
Accountability, value, comparable
sales, absorption rate are critical ingredients
of an appraisal in today’s market."
Question: All parties to the real
estate transaction are expecting the
Appraiser to provide a deeper analysis of
the market – Would you please discuss the
new Home Value Code of Conduct that
went into effect on May 1 which I believe
includes guidelines that will restrict mortgage
brokers and lenders from ordering
By Ed Gray
Ed Gray & Associates Real Estate Appraisers & Consultants
Questions & Answers On Appraisals
appraisals.
Answer: There has been considerable
confusion and misconceptions with
regard to the HVCC. Lenders are permitted
to engage appraisers directly without
reliance on third party vendors. Using an
AMC as a middle man can result in higher
appraisal fees for the consumer.
There is nothing in the Code that
prevents an appraiser from dealing directly
with the Lender as long as the Lender has
someone on the other side of the house that
is separate from the loan production department.
The code requires that the loan production
department not be involved in
ordering the appraisal. Mortgage brokers
are still a part of the appraisal process since
HUD does not require HVCC. Many mortgage
brokers are directing loans to FHA.
The Code does not apply to appraisals for
cancelling mortgage insurance, and
appraisals performed for loss mitigation.
Question: What is the lender
expecting you to show for comparable
properties to justify your appraisal (for
example, how many sales to compare to and
how far back can you go?
Answer: Many Lender requirements
have placed tighter restrictions on the
appraisal process. They are very interested
in "Today's Value", requesting a least two
comparable sales within the last 90 days in
addition to active listings. The 1004 Market
Conditions Report is now a required supplement
to the appraisal process. This provides
quarterly tracking of sales, listing data
and market performance. This procedure
has been adopted by VA, FHA, and Fannie
Mae.
Question: Does the HVCC prevent a
REALTOR from communicating with an
Appraiser regarding points that could
impact the appraisal of a property?
Answer: No. There are no restrictions.
The REALTOR is a valuable source
of information.
Question: Is an appraisal transferable?
Answer: Yes. The HVCC encourages
the portability of an appraisal. A lender
may accept an appraisal from a different
lender that complies with the requirements
of the Code.
Question: What is the difference in a
neighborhood vs. a subdivision when using
comparable properties for an appraisal?
Answer: A neighborhood generally
consist of several subdivisions located within
a specific market. If sales are limited in
one subdivision, the appraiser has the
option to select appropriate comparables
from a competing subdivision in the same
neighborhood.
Question: How different is a relocation
appraisal?
Answer: There can be a significant
difference between a mortgage appraisal
and a relocation appraisal. The purpose of
the Relocation appraisal is to develop an
"anticipated sale price" within the parameters
set by the Employer through the
Employee Relocation Council. Typically
the appraiser is asked to anticipate the price
that a property will sell within 90-120 days.
"Sales Price and Market Value are not synonymous."
Question: How can someone appeal
an appraisal?
Answer: Once the appraisal has
been submitted to the Lender, the process
requires the appeal be made through the
Lender. It is best to communicate any pertinent
data to the appraiser prior to completing
the appraisal. Especially if itinvolves a
borderline property. Good business practice
dictates that an appraiser respond to an
appeal made through the Lender.
Edward Gray is an SRA designated
member of the Appraisal Institute and holds
the GAA designation of NAR. He is a
member of both SABOR and New
Braunfels Board of Realtors, former
President of the South Texas Chapter of the
Appraisal Institute. Further information can
be found online at edgrayassociates.com.
The appraisers at ED GRAY & ASSOCI-
ATES are always ready to answer any questions
and or look up any information by
calling 210-340-1137.
The Department of Housing and
Urban Development has released a new
handbook known as HUD 4155.2. You can
view this handbook in its entirety, at
www.fhaoutreach.gov/FHAHandbook/prod
/contents.asp?address=4155-2.
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