How to manage the HVCC appraisal process, Alameda County
Since the inception of the Home Value Code of Conduct (HVCC) that governs residential appraisals, we have heard from real estate agents in Alameda County that the appraisal process has become a real thorn in their sides.
A common concern among agents is that appraisers are being assigned by the Appraisal Mangement Companies (AMC) who have little experience in general and/or have no knowledge of the local market. While HVCC prevents loan officers from contacting the appraisers directly, real estate agents, in an effort to get accurate appraisals, are allowed and probably should insist on having direct communication with the appraiser.
Much of what follows was supplemented by one of the most experienced appraisers in our market, Allison Teeman of Yovino and Young.
Below are some tips that real estate agents can use to manage the HVCC appraisal process.
1. Have a telephone conversation with the appraiser before the appointment (once the purchase contract is signed, remove the lock box so the appraiser must call you) and ask them about their experience in general and their experience with the subject property neighborhood in particular. If you are not comfortable with the answer, contact the loan officer who, through the AMC (Appraisal Management Company), can request an alternate appraiser.
2. If providing comparables to support values, be prepared with FNMA and FHLMC acceptable comparables which are:
a. Sold within 90 days, or 180 days if market is not declining
b. Within a mile radius of the subject
c. Within 25% of the sales price
d. Within 25% of the square footage
e. Comparables should be of similar style to the subject
3. If you know why a comparable sold for significantly less than the subject, you should share your knowledge of the comp. Most likely, the appraiser has never been inside the comparable, nor does he/she likely know "the story" behind it.
4. If you have background knowledge of how and why a property is selling for more than list, you should share the story
5. If there are no good comparables within the preferred guidelines, be prepared to provide comparables that are close, ie. 180 days sold or within a 2 mile radius
6. In addition to sold comparables, be prepared to provide comparable pendings. Pendings have significant weight, as they can provide the most current indication of market value.
7. Learn how to properly rebut an appraisal. Your loan officer should be able to help you.
8. Once you have provided the appraiser with the information that you think is pertinent, let him/her do their job. Be respectful and polite and it can go a long way.