This morning I was invited to be a guest to talk about appraisers and how they are impacting the flow of housing sales. I was initially concerned that this would be an appraiser slam piece, blaming our industry for killing sales, causing global warming and low salaries of central bankers but it wasn’t and I think I covered the bases. Kinda surreal – met and spoke briefly to Dick Morris in the green room. Cavuto was very personable before the segment, we talked about the issue before we went on.
* Sellers are generally a year behind the market
* The ranks of good appraisers were decimated by the mortgage boom
* Appraisers have long been the “punching bag” of blown deals
* Lack of data is a huge issue
Connie De Groot, who was the Beverly Hills real estate agent who is a regular on FBN recommended that buyers get an appraisal when pricing their property for sale – as Cavuto commented on my neutraility point, a “Swiss Appraiser.”
Watch the clip here or you can watch it here.
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Hey. It worked this time. Must be the blizzard.
“The ranks of good appraisers were decimated by the mortgage boom.”
Accurate code for the decent clients were eaten alive by faster, cheaper, hit the number, snake oil salesmen. This concept of “blowing the deal” is critical to our profession. By golly if blowing it is a possibility then the appraiser better be good.
I’m hearing from some of my acquaintances in the mortgage appraising business that the banks are not so much wanting conservative appraisals, but they do want them to look that way.
This is still about banks making lots of money and not so much about conservative risk taking. I’m not sure where appraising is useful in that mind set, but there has been a paradigm shift in lending philosophy that we need to deal with and we appraisers are sounding a bit like tent revival preachers on skid row. I once believed mortgage appraisals were something other than a tax on the mortgage industry or a file-stuffer.
Good talk Jonathan. The broker sounded like she had her head together. Listing appraisals??? One in hundred! That is not the Realtor way of wandering in the desert until you cause manna to fall from heaven.
Is that true, Jonathan? Comps are for 3 months now vs. 6,and the worst 3 months at that? How can we have a “spring bump” if they are only going to count pre-spring and then attach a “declining market” final price cut? By those parameters, the market can’t go even a tad up in Spring.
Not good news to hear.
Good observation. No – we aren’t being given that kind of restriction, however, more current is better. We are trying to reflect current market value in a market without a lot of comps. A comp used in the same month a year prior would be 20% to 25% higher than the current market, so its less telling to rely on a transaction pre-September tipping point.
I think it was “the other guest” who said 3 months vs. 6 months. I wouldn’t expect an appraiser to go back earlier than 6 months. But I also wouldn’t expect them to take a cut off of the comps for “declining market” going from 4th quarter into “spring bump”.
I’m a bit concerned that appraisers may put their foot on the neck of “spring bump”. If there is zero allowance for an April sale to be higher than December or January, well just tell me that won’t happen please.
It almost doesn’t matter what we do – lenders will apply the haircut anyway, at least at the moment.
🙁