Asheville Homes and LAND!- The Keep In Touch Blog


New rules for Appraising - coming 9/1/2011

"Our Friends at Fannie and Freddie, have decided to change the way appraisers describe the quality and condition of homes we appraise and the comparables we use. ..." wrote BEVERLY BAYER, a long time Appraiser. Read what someone in the Appraisal business haas to say about the new rules and regulations in the following post...

Our Friends at Fannie and Freddie, have decided to change the way appraisers describe the quality and condition of homes we appraise and the comparables we use. 

Since I started appraising in 1977 - we described properties as being: Good, Average, Fair or Poor - sometimes adding "very good" or "excellent" or fudging with "low-average" or "average-" - knowing if you determined the condition or quality of the home as fair or poor - you probably killed the deal.  So many appraisers pre-set "average" in their appraisals for the subject & comps. Which I will admit is a problem.

On 9/1/2011 and beyond we will need to define condition on a C1 - to - C6 scale and quality on a Q1 to Q6 scale.  1 is considered the best - for condition a new or unlived in dwelling.  A C6 condition is a property with substantial damage or defered maintenance. 

For views we will need to use the following codes: A, B or N -- what do they mean: A = adverse (hurts value or marketability); B = Beneficial (that's good) and N = Neutral.  and if it is a view lot - how about B;MTn;Wtr -- what?  that is a beneficial view of mountains and water - not just for the subject, but also the comps get these codes and abbrevations.  Are you confused yet? 

Now if you have 2 and 1/2 baths the correct way to show the count will be 2.1 and if the house has 2 1/2 baths = 2.2 

For Kitchens and baths we will need to report if they have been "updated" "not updated" or "remodeled" and if the work was done in less than 1-year; 1-5 years, 6-10 years, 11-15 years ago or unknown.  An updated bath might have a new toilet, and remodeled bath an all new shower. 

We will need the have a cheat sheet to fill out our appraisals (no pre-set - boiler plate will do), and provide definations for all the abbreviations.  And will be clients be confused - yes, Sir! 

This all is going to add to the write up time of appraisals, coming in on the heels of a majority of our work coming from low paying AMCs who want the appraisals back in 2-days time. 

I understand the need for more specific information and by using numbers and not wiggle words like "average" will help in underwritting loans, but it will be a tough transition. 

Appraisers are already upset with the reasonable and customary fee requirements that started April 1 - as the AMCs think they can continue paying 40% of the appraisal fee to their appraisers - and not bump up to what we were paid before HVCC.  And there is still anger about the time needed to do the 1004MC report. 

We have already lost about 1/3 of appraisers in California - who is going to do the valuation work.  Yes, there are BPOs - but they are paying too low for an agent who has enough real work.  And the AVMs never did address quality and condition - just did some kind of averaging. 


Beverly A. Bayer, SRA







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