NEW ORLEANS, Nov. 10 /PRNewswire/ -- In today's transitioning real
estate marketplace, pricing a home properly is one of the biggest
challenges that sellers face. Providing accurate property valuations in
this environment can be complicated, as well.
In the session, "The Low Appraisal: Recourses and Remedies," today at
the 2006 REALTORS(R) Conference & Expo here, a panel of experts told
Realtors(R) how to handle a transaction in which a buyer and seller agree
on a sales price that's higher than the home's appraised value.
For consumers, appraisals are an often unnoticed but essential part of
the home buying or refinancing process. Most lenders require property
appraisals when granting mortgages to ensure that they are not lending more
than a home's value. Appraisals also protect buyers by preventing them from
paying too much for a home. High appraisals can sometimes be an indication
of mortgage fraud, which has already resulted in $546 million in losses in
the first half of 2006, according to the Federal Bureau of Investigation.
Low appraisals can prevent buyers from getting a mortgage and inhibit a
home sale.
The National Association of Realtors(R) represents about 30,000 state-
licensed and certified appraisers throughout the country. NAR recommends
that lenders be required to inform borrowers of the methods used to value a
property to determine the amount of the mortgage loan, and that borrowers
have the right to obtain a copy of all value estimates or value opinions on
the property.
"Like all NAR members, these appraisers commit to a Code of Ethics that
helps protect the public. Realtors(R), appraisers and lenders must work
together to support the fundamentals of the lending process and to ensure
that housing remains a good investment," said Thomas M. Stevens, NAR
president from Vienna, Va., and senior vice president of NRT Inc.
"All appraisers are bound by the Uniform Standards of Professional
Appraisal Practice -- USPAP -- and Realtors(R) and lenders are bound by the
professional, regulatory and ethical obligations of their respective
professions, as well," said Joseph Traynor, 2004 NAR Regional Vice
President for Region 7 (Illinois, Indiana and Wisconsin) and member of the
2006 Board of Trustees for the Appraisal Foundation.
"Low appraisals can be frustrating and sometimes costly to all parties
involved in the transaction, but by working together, these professionals
can ensure that the interests of both home buyers and sellers are
protected."
The panel recommended strategies for helping buyers and sellers close
the deal when a home's valuation is lower than its contracted sales price.
Participants advised Realtors(R) to approach the appraisal process
proactively by providing the appraiser all information relevant to the
property and describing what factors contributed to the original asking
price. If the appraisal is depressed because of specific problems with the
property that will be remedied, these plans must be shared with the
appraiser, as well.
Panelists also discussed factors that influence low appraisals, such as
a home that has been over-improved for its neighborhood, an oversupply of
properties in the area, recent neighborhood foreclosures, and the state of
the region's general economic climate.
In addition to Traynor, the panelists were Melanie McLane, a
Realtor(R), appraiser and member of NAR's Appraisal Committee; and Deb
Nikodym, senior vice president for quality assurance for Rels Valuation.
The National Association of Realtors(R), "The Voice for Real Estate,"
is America's largest trade association, representing more than 1.3 million
members involved in all aspects of the residential and commercial real
estate industries.
Information about NAR is available at http://www.REALTOR.org. This and
other news releases are posted in the Web site's "News Media" section in
the NAR Media Center.
|
