HVCC and Uncertainty
The May 8 edition of The Los Angeles Times features an article titled “Home appraisals still fraught with uncertainty despite new code of conduct,” and its focus is no stranger to this blog – the HVCC.
As the article points out, the Home Valuation Code of Conduct (HVCC) was supposed to result in better, more honest appraisals. But a year after it was put in place, there’s still a question of whether or not home buyers are getting their money’s worth.
Real estate professionals, mortgage brokers, and even some appraisers themselves complain that lenders are using appraisers who lack experience, sometimes travel great distances to determine values in unfamiliar areas, or base their determinations on sales that are not similar to the property they are appraising.
So if you hire an appraiser that you feel violates the standards of his or her profession or is downright incompetent, you should definitely report him or her. If you think the valuation has come in way too low, you need to appeal, but with as much finesse as possible. Bear in mind that if the lender orders the appraiser to take a second look, it’s like telling him he was wrong the first time.
Of course, you can always ask for a second opinion from another appraiser. But you’ll have to pay for that one, too. Moreover, to stand any chance of winning your point, the second valuation must be more than 5% higher than the first. Anything less is considered an acceptable difference. Besides, even if the second appraisal is far above the first, it’s the lender, not you, who gets to pick the appraisal on which the loan is based.
The issues created by the well-meaning HVCC appear to be growing and new problems seem to keep cropping up. It’s more important than ever to make sure you use an established, licensed appraiser.
By: Present Value
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