Brokers Blog

Closing a deal is now more complicated, all thanks to the new appraisal rules. Property appraisals are now at arm’s-length, meaning transactions must be done by unaffiliated parties. It is now the national management company’s job to evaluate home prices, and communication between real estate brokers and the appraisers are discouraged.

Lenders, borrowers, buyers and real estate brokers are feeling the effect of the new rules intended to stop inflationary appraisals that caused the housing boom.

Real estate brokers from South Florida, along with their clients complain that the new rules bring appraisals down, risking refinancing applications and home sales. They fear that the new appraisal will interrupt the slow increase of home sales.

New York’s Attorney General Andrew Cuomo proposed these new appraisal rules applicable for Freddie Mac and Fannie Mae loans only. Many are affected since majority of home loans are sold to this government-ran mortgage businesses. But FHA and VA approved loans are not included.

But real estate brokers and lenders say that management companies put appraisers to areas in which they are unfamiliar. Then these new appraisers take most of the fees away from more experienced appraisers. Like in Oregon, Valuation Logistics only gets $25 from the $450 appraisal fee.

Appraisers were one of those blamed by the lenders for their huge losses in the past. So to please lenders, appraisers are valuing properties at the lower end of the range. But real estate brokers and mortgage brokers do not see it that way. Appraisers defend that they are just doing their job by considering short sales and foreclosures within the area, the big factors that bring home prices lower.

Real estate brokers and mortgage brokers are dismayed that appraisals are now out of their hands. Mortgage and real estate brokers’ income rely mostly on sales so their disappointments are understandable. But what can they do, this is the new rule.

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There used to be a small number of environmental friendly homes in the market. But due to the recent awareness campaigns, more and more home buyers are considering these Green homes and more real state brokers are adding these homes into their listings.

Nashville real estate brokers have added a new feature to their listing services where buyers and agents can search for homes with environmental-friendly features.

One of the popular searches is Energy Star certifications. This is a Department of Energy program that certify homes that are 20 to 30 percent more energy efficient that the usual American home.

Builders like The Jones Co. of Tennessee and Fox Ridges Homes are creating a larger inventory of homes certified by Energy Star.

These energy-efficient and eco-friendly features can cost 10 percent more than the usual home price. This makes it hard for real estate brokers to sell. But they are optimistic, that with the current awareness and concern, more green-homebuyers will emerge.

A real estate broker said that 124 Energy Star-certified homes were sold this year, thanks to the search function upgrade. Jones Co., which just started building Energy Star-approved homes last fall, already sold 15 units. Meanwhile, there are only 5 LEED (Leadership in Energy and Environmental Design) – approved homes sold since these are more pricey.

Energy price continues to increase that is why more are considering energy efficiency in their home purchase. Real state brokers noticed an increase in their sales when the Tennessee Valley Authority increase electricity rates by 20 percent late last year.

Plus, more families would want to contribute in saving our planet.

One three-bedroom green bungalow was sold at $279,000, 10 to 15 percent pricier due to all the energy efficient add-ons. But come to think of it, you can actually save 20- 30 percent worth of electric bills monthly.

An increasing number of homebuilders are getting an Energy Star certification because a lot of current appliances and building materials are energy efficient. Some homebuilders say eco-friendly add-ons can only add less than 10 percent to the actual rice of the home.

But you will notice that there are only a few old homes with environmental improvements. This is because it is more expensive to give a green makeover to an existing house than to insert it in a new home.

Real estate brokers admit that green homes are tough sells, but the marketability is looking good for the future, why not start building and advertising now. The widening planet health awareness can make these green homes more attractive.

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