Thursday, February 4, 2010

From my friend - Appraiser Jackie Monette

Times are tough and it's more important than ever for all segments of
our industry to work together. As an appraiser, I can tell you that
banks are interested in seeing in contract properties and listed
properties on an appraisal report that support the value of the house
being appraised. Most of my work is done in areas where MLS coverage is
sketchy at best and this info is not readily available to me. A broker
who can provide this information and perhaps some indication of the true
condition of these homes becomes an invaluable tool in the appraisal
process. Perhaps one of the biggest issues in the present banking
climate is the appraiser coming from outside the area. Besides the
obvious lack of knowledge of the area, there is a more subtle deal
breaking phenomenon at work here. If an appraiser comes in at a value
equal to the sale price of a property and the bank is not satisfied with
the comps provided (which happened a lot over the past year when there
weren't enough sales), the bank will ask the appraiser for more comps
and the appraiser is expected (for no more remuneration) to go out and
get more comps. However, if the appraiser comes in lower than the sale
price, the bank sits back and waits to see what happens. If the seller
and buyer renegotiate to the lower price, the deal goes forward. If
they don't, the deal dies. The appraiser is never asked to find more
comps. It is to the advantage of a far away appraiser to bring in the
homes at this lower value so as to avoid an extra trip. I am sure many
of you have been caught in the middle of this nightmare scenario. The
appraisal industry is trying to lobby for legislation to stop this
practice. Hopefully, realtors will also join in this effort.

Please help the appraisers out there and lobby your legislator.

Jackie can be reached at 631-431-0035 with questions and comments.