New Appraisers Impede Sales for Real Estate Brokers
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.
