It’s impossible to research the subject of buying a home without coming across a headline declaring that the fall in home affordability is a crisis. However, when we add context to the most
Dated: July 29 2020
Most buyers are required by their lender to get an appraisal as a part of buying their next home. Most sellers are anxious to find out if the appraised value meets or exceeds the Sales Price. So what can be done to help the appraiser come up with the right number? The Uniform Standards of Professional Appraisal Practice (USPAP) has some answers.
What is Appraiser Independence?
The role of the appraiser is to provide an independent and impartial analysis of real property. This analysis is a critical component of the mortgage transaction and, over the past few years, new laws, rules and regulations have been implemented in an effort to protect the independence of the appraiser.
The National Association of Realtors (NAR) strongly supports the independence of appraisers and the appraisal process. Compromising independence impacts the quality of appraisal reports adding risks for both consumers and lenders.
Can REALTORS, Homeowners, Buyers & Sellers Talk to Appraisers Once the Report Has Been Sent to the Client?
Once an appraisal assignment is completed and sent to the client, USPAP prohibits an appraiser from discussing the resultsof the report with anyone but the client who ordered the appraisal, or parties designated by the client. In order to ask an appraiser to correct errors in the appraisal report, an agent must use the client, usually the lender, as an intermediary. The client may choose to provide additional data to the appraiser for consideration.
The REALTORS Role in the Appraisal Process
The REALTORS only role in the appraisal process is to provide access to the subject property so the appraiser can perform the appraisal inspection. In most cases this can be done by placing a lockbox on the property. REALTORS are prohibited from influencing value.
REALTORS may provide plats, surveys, deed, convenants, HOA Documents, floor plans, specifications, inspection reports, neighborhood details, recent similar-quality comparables, detailed list and dates of upgrades, remodels and costs, and energy-efficient green features.
However, the appraiser does not have to accept the REALTORS comparables and/or their "appraisal packet." Insisting to meet the appraiser at the property so the REALTOR can hand the appraiser comparables and insist that they are "neighborhood experts" is walking a fine line of trying influence value.
Violating Appraiser Independence is Against the Law
According to 15 US Code 1639e: It shall be unlawful in extending credit or in providing any services for a consumer credit transaction secured by the principal dwelling of the consumer, to engage in any act or practice that violates appraisal independence as described in or pursuant to regulations prescribed in this section....(READ MORE)
The Rebuttal Process
Only the client (in most cases the lender) may choose to initiate the rebuttal process and provide additional data to the appraiser for consideration. Before launching into a rebuttal, first make sure to ask the lender what their process is for challening an appraisal so you know you are spending your time wisely. They might have their own form, etc. Remember, a reconsideration of value must come to the appraiser from the lender.
Why is Appraisal Independence Important?
Appraisal Independence is important because it protects the independence of the appraisers and the integrity of their reports. It extends the these important protections to home buyers, mortgage investors and the overall housing market. Additionally, it reinforces FANNIE MAE & FREDDIE MAC's commitment to responsible lending and mortgage quality standards.
If you run into an appraisal issue where the appraisal fails to meet the sales price, you have options to keep the deal together. It's important to know what those options are and how to navigate them to protect yourself and your interest in the transaction.
Because The Hybrid Agent see 1,000's of contract a year, we are well versed in the appraisal and rebuttal processes and are eager to help our clients successfully navigate the potentially confusing landscape of appraisals. Call us today at 833-433-6683 and we will gladly help you!
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