As we are quickly approaching the Spring “real estate season”, I wanted to make sure that we were all current on the new appraisal situation. The appraisal process can leave sellers in a state of confusion. Unfortunately, lack of knowledge can be detrimental to obtaining the best price and fast closing for even the most competitive properties. Following are some guidelines to follow for best results:
1. Understand the Home Value Code of Conduct (HVCC): The code stipulates that brokers, loan officers and others who earn income from the close of a loan cannot select a specific appraiser or attempt to influence an appraised property value by questioning or disputing the appraisal.
2. Understand the Appraisal Process: Determining the value of a property requires experience in evaluating the local market, type of property and market value. Most appraisers take location, condition of the home,
comparable sales in the area and potential income data into consideration when creating a Uniform Residential Appraisal Report or similar form.
3. Delineate the Scope of Work: Determine in advance whether or not you need a limited or complete appraisal, including the intended use of the report, delivery date and who will have access to the appraiser.
4. Don’t Confuse Price With Value: Many sellers confuse asking price with the market value of their home. While the two should relate to one another, they are not necessarily the same. For example, investment income may represent a premium over the market value due to the additional income generated. Ask your agent about special situations that may impact price versus value.