HOW ARE VALUES EVER GOING TO GO UP?

We have a problem. We are creating the perfect storm.

• As Erin Attardi's post

"Erin Attardi's Short Sale Experiment" reflects, there are areas where the majority of available properties are short sales (and I suspect a few foreclosures thrown in).

In the new HVCC regulations, appraisers cannot be in communication with Realtors, agents or lenders.

• It is more important for comparables to be recent than accurate.

Allow me to elaborate. At one time, appraisers would take into account that a property was a foreclosure or short sale when they were doing their appraisal and adjust accordingly. If we, as Realtors, felt that inappropriate comparables were being used, we could discuss the issue with the appraiser. Appraisers, if they felt we had a valid point, could change their appraisal. Comparable properties could have closed within the last 6 months. If the market had changed, the appraiser would adjust accordingly.

Presently, appraisers are coming up with value by using the lowest common denominators...the short sales and foreclosures. No longer is there an adjustment for these types of sales. Due to HVCC, appraisers can come in and appraise in an area that they have no experience in...and we have no way to help them or provide information to encourage accuracy. With a shortage of comparable sales in now a demanded 3 month period, appraisers are being told to go outside the true area the home is in, thus throwing off the true value of the property.

So, if we are valuing our listings by the lowest common denominator, and there is no adjustment for the type of sale they are (generally seriously discounted), how are we ever going to see our equity start building again? The rules to "protect the consumer" is now the consumers worst enemy.

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