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Seattle Mortgages: Appraisals Hurting Housing Recovery

money | 24 June, 2009 07:29

Home values are being pushed lower in part due to previously foreclosed and distressed sales showing up on appraisals.

Home builders are the first to loudly complaign though everyone in the business is grumbling about the horrible turn times and lack of quality. The big complaint is that appraisals aren’t taking into account differences in condition between well maintained homes (non distressed) and those that are distressed. One reason is that appraisers are not able to view the inside of foreclosed homes to make accurate comparison. Often times appraisers simply drive by these comparables and most times only view them on the MLS for research purposes.

It only makes sense that an appraiser should be required to consider the overall condition of a property in relation to foreclosures and distressed property saled when selecting and adjusting the value of comparables.

Some have suggested home appraisers be given an expanded right to view greater radius areas and an extended time frame for recent sales to assess home values in areas wraught with foreclosures.

It also makes it more difficult to sell homes, or allow current homeowners to refinance, as appraisers aren’t coming up with an accurate value due to improper comparables.

Since appraiser are also having to share their revenue now with appraisal management firms, they tend not to spend as much time on the quality of the appraisal.

We can't blame appraisers, they are only doing what they are prescribed to do for the modest pay they recieve. Builders, real estate agents and mortgage professionals allowed the situation to get out of hand and now the government has to prescribe a solution. Anytime the government gets involved you have to be worried that the solution is going to be worse than the problem.