Saturday, May 17, 2008

home values

For the purpose of a refinance and a sale, the property will most likely be appraised to judge its value for purpose of a loan. What consumers do not realize is that the appraiser works for the lender. The lender is the client not the home owner or the buyer.The consumer may recieve a copy of the report for limited use or just for their records. The lender, as the client of the appraiser, sets the scope within which the appraisal is performed. When the client (lender) asks that the scope of work include only the most recent transactions of the last 2-3 months this can result in great strain for certain properties. How can properties not decline in value under these strick conditions. Sales to use as comparables have been sparce. If sales are occuring they are most likely under distress. Now we have created a self fulfilling prophecy. Property values will continue to decline because of the enviorment that is being created. We all understand the mees the lenders are in nationwide...BUT...REAL ESTATE markets are local. The lenders are looking for safe loans. Understood. Wide sweeping guidlines are NOT the answer.