Appraisal Schush-maizal

Appraisers often have a thankless job - many borrowers and even industry professionals often don't quite understand all that their position in our transaction requires. They dont understand:

A) why they want to paid up front for the service, regardless of the potential closing possibility?
B) "Why is the report taking so long? He left my house an hour ago?"
C) "$400.00 for him to spend 10 minutes at my house, is he kidding?"
or, my personal favorite...

D) "Please call your appraiser and let him know I've already purchased the soil for the azaleas I'm planting this weekend. My home value will definately have increased by Monday"

Appraisal reports are intensive with ... dah dum... an actual science and true formulated calculations that must follow strict federal guidelines. These licensed individuals are heavily regulated and often provide the absolute most valuable component to the transaction and/or financing process (sorry Realtors, it's not the contract).



New guidelines will require even more of these real estate partners.

As of April 1st all FHA appraisals are required to include a Market Conditions Addendum a.k.a FNMA Form 1004/MC or FHLMC Form 71.

Even more requirements will son be in effect for all FHA appraisals, as per the hud mortgagee letter (read in full by clicking link). Here are a few in lay terms as they pertain to those in Declining Markets.

Appraisals of properties located in declining markets must include at least two comparable sales that closed within 90 days prior to the effective date of the appraisal. In markets where this isn't available than a detailed explanation must be given, and the appraiser is expected to include at least two sales that are as similar as possible, to the subject and has closed 90 days of the effective date of the appraisal, in order to show recent market activity.

Appraiser must insure that active listings and pending sales are "market tested" and have reasonable market exposure, to avoid the use of "over priced" properties as comparables. Reasonable market exposure is determined by typical marketing times, for the specific neighborhood. Adjust active listings to reflect list to sale price ratios for the market.

Include the original list price, any revised list prices, and total days on the market (DOM). Appraiser is also required to provide an explanation for DOM that do not approximate time frames reported in the Neighborhood section of the appraisal reporting form or that do not coincide with the DOM noted in the Market Conditions Addendum.

Yikes... how much do they make again?