Posts Tagged ‘Real estate appraisals’
An Update on HVCC
The Home Valuation Code of Conduct (HVCC), about which we’ve written several blogs, was enacted to provide better, more honest real estate appraisals. To say that the HVCC was and is controversial is a massive understatement, and most real estate appraisers have been counting down the days until November 1, 2010, when the HVCC agreement between Freddie Mac, Fannie Mae, and the New York state attorney general is set to expire.
Unfortunately for appraisers, November 1 may not be a day for confetti and champagne after all. Though that is the expiration date, it doesn’t necessarily mean that HVCC will disappear on that day. Fannie Mae, Freddie Mac, and other lenders are not required to remove HVCC guidelines from seller service agreements after the deadline, and as of right now, the belief within the industry is that the HVCC will linger well after the expiration date.
As they have been since its inception, new problems created by the well-meaning HVCC seem to keep cropping up and the issues appear to be growing. It’s more important than ever to make sure you use an established, licensed appraiser.
By: Present Value
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Be Sure to Use a Reputable Appraiser
An article in the May 19 edition of The Champion tells an important cautionary tale about a Georgia-based real estate appraiser who was sentenced to almost three years in federal prison for his part in a real estate appraisal scam.
According to the article, Edward Farley, the so-called ringleader in the scam, caused $23 million in losses to lenders by having Walter Herman, a real estate appraiser, inflate the value of each property he appraised by $50,000 to $100,000, and then found inexperienced investors to purchase the properties from one of his real estate companies. Farley received a 25-year sentence, and Herman received the nearly three-year sentence for complicity.
This incident underscores the importance of a point we’ve made many times across many blogs – be sure you use a licensed, established, reputable real estate appraiser. Thoroughly check their credentials. Find out if they belong to appraisal organizations, like NEBBI and NAPA. And if something seems wrong, be sure you speak up.
By: Present Value
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Appraisers Seeking Resources to Determine the Value of Green Buildings
Real estate appraisers are struggling to determine the value of green building construction because the market is still in its infancy; there is lack of comparable property data and other market information. The current real estate market poses difficulties for any new construction appraisal, and the nascent green building construction market is exceedingly more difficult for appraisers.
There are some resources available for appraisers, however, to be better equipped to appraise in this burgeoning market. The Appraisal Institute, membership association of professional real estate appraisers, offers seminars and a certification program that can help appraisers value green buildings, including its upcoming webinar: Residential Green Valuation: Tools for Valuing High Performance Properties. The proposed Green Resources for Energy Efficient Neighborhoods (GREEN) Act legislation will mandate that appraisers have all relevant information about residential property – including plans and specs, green energy labels, and certifications and Home Energy Rater Score (HERS) ratings.
It is clear that green building is only going to become more popular, especially once the real estate market turns around; although it may take some time, appraisers will need to understand all the new complexities in this field of appraisal and adapt.
By: Present Value
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Working with HVCC Regulations
A recent article in Banker & Tradesman suggests that consumer confidence in the real estate market is coming back. Coming out of the 2009 Realtors Conference & Expo in San Diego, the article indicates that in spite of the decline of the market, buyers are still looking for vacation and recreational properties.
Industry experts, however, still appear to be concerned about issues surrounding real estate appraisals and the unintended consequences of the implementation of the Home Valuation Code of Conduct (HVCC). As we have discussed in other blog posts, the perceived problem is that appraisers, working for appraisal management companies, are often working outside areas with which they are familiar and may not have access to information about specific markets. Realtors argue that as a result of valuations that sometimes are too low, sales have been delayed and even cancelled.
This Banker & Tradesman article provides some interesting suggestions by realty agents of ways to work with the HVCC changes, including providing appraisers with detailed property comparison information and background materials to help appraisers achieve the most accurate appraisals.
As always, Present Value LLC is both an appraiser and an appraisal management company, which means that it can play the role of the third party required by the HVCC changes and save you the step of having to seek out a separate appraisal management company.
By: Present Value
Present Value LLC and the upcoming HVCC changes
Earlier this month, we wrote about the Home Valuation Code of Conduct (HVCC) changes that will go into effect on May 1 of this year. You can read the full post here. Essentially, the changes state that lenders seeking a conventional appraisal, as opposed to an FHA appraisal, will be required to find an appraiser through a third party, such as an appraisal management company.
If you’re seeking an FHA appraisal, your interaction with Present Value won’t change. Because the HVCC changes don’t affect FHA appraisals, lenders can still contact Present Value directly. And more good news – if you’re seeking a conventional appraisal, your interaction with Present Value will also remain the same. Present Value LLC is both an appraiser and an appraisal management company, which means that it can play the role of the third party required by the HVCC changes and save you the step of having to seek out a separate appraisal management company. One of the principles to which Present Value adheres is to provide the best possible customer service. As these changes go into effect and people begin to navigate what the changes mean for them, we hope that the lack of disruption in service you’ll experience by working with Present Value will prove our dedication to this principle.
In other news, have you had the chance to check out our introductory video? Click here to watch.
By: Present Value
Upcoming HVCC Changes
The Home Valuation Code of Conduct (HVCC) dictates rules regarding the interaction between appraisers and the lending industry. A copy of the full HVCC can be found here. On May 1, 2009, changes to the HVCC will go into effect. The changes state that rather than going to an appraiser directly, lenders must order a real estate appraisal through a third party, such as an appraisal management company.
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