Can my Realtor guarantee my house will appraise?
The honest answer is NO. No realtor can guarantee that your house will appraise at listed price, especially if you are listing at TOP DOLLAR. After the housing price debacle of 1999, Fannie Mae & Freddie Mac, who together guarantee 59% of all mortgages written in the United States today, established a set of Guidelines known as HVCC (Home Valuation Code of Conduct). The purpose of HVCC is to stop collaboration between lenders and appraisers to prevent inflated appraisals and future housing bubbles of the kind that brought all of us to this dance. FHA & VA loans have separate but similar appraisal rules.
- Mortage Brokers cannot pick appraisers directly. They can order an appraisal through a third-party appraisal management company (AMC). The lender (usually a Bank) or AMC then selects a licensed appraiser from their AMC roster. Mortgage Brokers and Real Estate Agents/Brokers cannot directly influence the selection of your appraiser.
- A Mortgage Broker CAN reject an appraiser selected by an AMC, hoping a trusted appraiser will then be selected. Preferably one familiar with the local area.
- Beware NON-LOCAL appraisers. HVCC guidelines, in practice, has translated in appraisers being assigned who live too far away, may not be aware of local conditions and whose appraisals can come in either over or under local market values. In practice, we see lower valuations much more frequently than over valuations.
- What CAN a real-estate agent do? While an agent cannot pick your appraiser, he or she IS allowed to communicate with your appraiser. A good agent can provide comparative property data and important information about the area to assist the appraiser in arriving at an accurate valuation of your home.
- The borrower is now entitled to receive a copy or your appraisal 3 days prior to closing.
Your Real Estate agent is a critical partner to ensuring the appraisal process goes as smoothly and as close to value as possible. No agent can guarantee appraisal at listed price.
During the process of selecting a listing agent, it is important select a PROFESSIONAL, full-time agent who is willing to be transparent, tell you the truth about the value of your house, and work diligently with your Loan Broker or Bank, Appraiser, and agents in your MLS area to help you sell your house at optimum value.