Birkdale and Birkdale Village;Why are Appraisals Killing Deals

There may be many reasons that appraisals are killing deals. Foreclosures, short sales and the like are definitely having an effect on what homes are appraising for.

However there is another reason that is not so apparent to the everyday homeowner.

To remedy illegal and unethical practices the Home Valuation Code of Conduct (HVCC) was implemented in 2009. This was done to force a wall between the lender and appraisers. If a lender did not have a wall in place they turned to (or formed) an Appraisal Management Corporation (AMC) to provide independent appraisal services. While this was created with good intentions, several unintended consequences were put into motion.

Like any business (AMC's) need to make money. They do this by taking a cut and try to make it up with volume. Understandably, the appraisers that are a part of the AMC are not happy to be paid less.

Also, AMC require quick turnaround. It seems quantity has taken over from quality.

When a new request is made to an AMC it sends out a bulk request to the appraisers in the AMC and it is assigned on a first come first serve basis. Marginal hungry appraisers will jump at first chance no matter the location or knowledge of the area. Appraisers from as far away as 5 counties could be assigned an appraisal for your Birkdale Village area home and it can make a big difference.

Here are some statistics from a survey NAR conducted on it's members in July 2009.

1. Even though appraisers are earning less, 70% of NAR Appraiser members reported that consumers are paying more. Why. One reason is that the AMC's created above are often times owned by the banks thus eliminating what HVCC was created for.

2. Appraisal quality us down.

3. Appraisals and closings are taking longer.

4. Lost sales due to a delayed appraisal were reported by 37% of agents.

How can an agent help you. Your agent should be able to bring extra value by giving you important information and insights and also knowing the 'good' lenders and make sure your agent can give you some good questions to ask your lender about HVCC and AMC's.

Deals can get done but it is taking more knowledgeable agents and consumers to make the right decisions.