Appraisal Groups Respond to NAHB Testimony
In an important step forward in resolving the issue of faulty appraisals, appraiser organizations responded last week to Oct. 7 testimony by NAHB Chairman Joe Robson before the House Small Business Committee on a number of housing priorities for the association.
In his testimony, Robson told lawmakers that the use by some appraisers of foreclosed or short-sale properties as comparables is resulting in inappropriately low appraisals that are effectively sinking one quarter of all new-home sales right now.
He said Congress can help resolve this issue by urging the Federal Housing Administration and Fannie Mae and Freddie Mac to adopt and enforce guidance that instructs appraisers on the proper procedures for the use of distressed and/or foreclosed properties as comparables.
To address this problem, the appraisal groups said in a written response to the House panel, mortgage lenders and financial institutions should:
- Seek out the services of highly qualified appraisers for complex appraisal assignments
- Recognize that sales concessions are as important as the condition of a property to the credibility and reliability of the appraisal
- Provide sufficient time for the real estate appraiser to conduct the proper analysis of the subject property and comparables used
- Promote communication between appraisers, builders and real estate agents
For more information on this issue, e-mail Bill Renner at NAHB, or call him at 800-368-5242 x8132.