As you are aware there have been recent changes made in Real Estate Appraisal practices which are having disasterous consequences and supressing the recovery of the housing market particularly here in Florida.   Appraisers who are now assigned from a pool and are usually from out of the area, have been making aggregious errors in the estimation of  property values. 

SUPPRESSING VALUE AND ECONOMIC RECOVERY       

They are suppressing the value of property in Central Florida, which is not only a disservice to consumers who are the key to the housing market recovery; but are, under the new guidelines, not allowed to consult with local area REALTORS® (who are State Licensed) and in the case of Real Estate Brokers, knowlegable area experts.  

 As a result of this rather limited pool of "pre-approved" appraisers home values are coming in drastically under current market value and transactions which should have closed are failing in large numbers.  While foreclosures and short sales negotiated with lenders reflect an under market price-they are being used as the standard comparable in almost all cases. 

CASE STUDY WHERE BUYER PAID CASH AND DISCOVERED HUGE EQUITY

In one such case a historic home sold the day before foreclosure preceedings for $85,000-the insurance company the buyer used valued the same home for $265,000.    

NOT ALL SHORT SALES AND FORECLOSURES DEALS ACCURATELY REFLECT MARKET VALUE...

IF THEY DID THEY WOULD NOT BE DEALS OF THE DECADE

Florida is experiencing a housing market recovery,however it is greatly thwarted as transactions collapse under the new guidelines.    Banks will not accept less than was negotiated, and in many (most)cases consumers are willing to make competitive offers, which later do not "appraise" under the new guidelines and shoddy appraisals these so called "experts" are writing.   

LOCATION     LOCATION     

When comparing property values we have seen cases where the appraisers lack of knowledge regarding the differences in local neighborhoods has caused a devaluation of a property's worth in excess of $20-40,000.   

 Price is determined using several factors. Location, age, condition, improvements, and functionality.

METHODOLOGY OF FINDING THE VALUE

Replacement cost is one method currently not being employed. Neither is reproductive cost. Both of which would be more accurate representations of what a home's  "value" is.
Highest and best use is only purposeful in estimating a commerical property yet we have seen references on residential properties regarding that term.  

WHEN DISASTER STRIKES...

If there were to be a natural disaster for instance, reproductive or replacement appraisal methodology would be employed to determine the value of the property's loss.  (In the billions)  Under these guidelines that will be resuced to the millions. Which would mean less aid for Florida unless a double standard is in play.  

CONSUMERS ARE AND HAVE BEEN THE DRIVING FORCE IN THE ECONOMIC RECOVERY

 Florida has the ability to show enormous housing growth, and public awareness of this issue is important.  Consumers are and have been the driving force to Florida's economic recovery via the housing market recovery.  They are returning to the Real Estate Market only to be shot down and unable to close on homes as a direct result of this new law regarding HVCC Appraisals.  

I urge you (Senator Nelson) to take a stand on this issue and am joined in this opinion by almost every Realtor, Real Estate Brokerage, Mortgage Company and Title Company who have been adversely impacted by this untenable law, which on a local level is causing harm to both consumers who wish to buy homes in Florida and professionals who are trying to sell them. 
The result is continued property value, suppression of sales, which are the vital key to Florida's economic recovery. 

 Is that really what Mr. Cuomo had in mind? And if so, why?

 Read more NAR member comments  here

Disclaimer: Opinions expressed in this blog are entirely that of the writer.