There have been plenty of problems with the implementation and execution of the Home Valuation Code of Conduct (HVCC) and most of them have been centered around the way this ridiculous system is taking options away from homeowners to buy, sell and refinance their real estate. Finally good news has been received in the office of America’s Mortgage Choice. Since its inception, we have seen more than ten (but less than twenty) transactions derailed by the HVCC for a variety of reasons. This week, for the first time, we received an appraisal that was in excess of the value estimated by the client. That’s right, an appraisal actually came in HIGH!
After reviewing the appraisal and having a quick discussion with the customer several telling things come to light that may help us all understand the appraisal process going forward. First, the appraiser that was assigned does a lot of work in the area and is very familiar with the neighborhood. Second, the area is a desirable community with less than the average amount of distressed sales and more “traditional” buys and sells. Finally, the customer met with the appraiser and discussed the upgrades they had made to the property since purchasing it. This allowed the appraiser to give some weight to the condition of the property as well. All told a solid, professional job was done by this appraiser. In fact, he should be hired more often to provide appraisals for our clients, if that was not against the rules anymore.
In summary it appears that three things have to happen for appraisals to get done right via HVCC.
- Plenty of non distressed action in the local market where the property is located. Too few transactions lead to lower appraisals.
- Appraiser must know the area (no this is not as obvious as it seems)
- Participation from the client in framing the discussion with the appraiser.
Since the mortgage broker is no longer involved with the appraisal, consider this a “how to” for getting accurate appraisals for buyers, sellers, refinancers and Realtors.
This is not likely a sign of things getting better with HVCC but more likely a glimpse into what can be done to ensure the most accurate value is reflected in the appraisal.
