New Rules for Appraisal

By
Real Estate Agent with Re/Max Alliance

Fannie Mae and Freddie Mac introduced additional steps to the appraisal process effective on May 1st.  Some of the new steps include:

  • Appraisers cannot communicate directly with lenders. The appraisal process must involve a third-party, such as an appraisal management company, to act as a go-between for appraisers and other parties, which increases the time to complete the appraisal
  • Under the old rules appraisers could evaluate just three comparable sold properties. Now, they must also evaluate at least two properties that are currently under contract or are active listings
  • Under the old rules appraisers could go back up to six months to find the three comparable sold properties. Now, at least two of the sold properties must have been sold in the past 90 days
  • Appraisers must fill out a "market conditions" report that reviews the market trends over the past 12 months, broken down into the most recent three months, the prior three months, and then the first six months of the period.

With these new rules that are in place, it will take longer to complete appraisal reports due to the greater requirements set on appraisers.  This is according to Cathy Miles of Appraisal Dimensions in Fort Collins. 

Comments (3)

Ralph Gorgoglione
Maui Life Homes / Metro Life Homes - Kihei, HI
Hawaii and California Real Estate (310) 497-9407

Good post.

Thanks for the info.

I don't even write in 30 days on my deals any more. I write at least 35-40 now because everything is taking so much longer.

By the way, LOVE the 'Do.

It's so Barbara Feldman in GetSmart.

And she was hot......

Aug 24, 2009 05:57 PM
Leslie Stewart
Oregon Licensed Broker with Berkshire Hathaway HomeServices Real Estate Professionals - Stayton, OR
Realtor, ABR, CRS, Oregon Licensed Broker

We are seeing a lot of appraisal reviews and second appraisals. I am not a fan of the new 'rules.'  There were a few bad apples out there but the new rules are chasing away the good ones from the areas where they are experts.  Some of the appraisers in our area are coming from 3 hours away.  This benefits no one. Not the appraiser, not the bank or the seller and the buyer. 

Aug 24, 2009 06:23 PM
Jon Rudolph
Inspections By Referral - Loveland, CO
ACI

Tracy,

Are you aware of any rules regarding Appaisers reporting on home physical condition?  It seems like they are but as a rule or just the lender's request?

It's funny, I've seen buyers go as far spray painting a home while I was inspecting it in order to prepare for the Appraisal and avoid being noted has having peeling paint by the Appraiser.

So as an example, how much does peeling paint bear on the assesment of the home's value?  Interesting.

Dec 01, 2009 09:25 AM