Appraising your appraiser

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The forecast for most real estate markets across the country is less than wildly optimistic. Houses are staying on the market longer, and prices are falling in many areas. It is now vitally important that home buyers and sellers understand a homes current market value. 

With all the publicity about foreclosures and scams surrounding the real estate finance industry, consumers are understandably nervous about buying and selling a house. As long as they understand how to stay on top of the transaction, theyll do OK.

The system is structured so that the mortgage company has control of the appraisal process.  It hires the appraisers; the buyers dont even if they are paying for the report. The pressure is on the appraiser because deals are made or broken depending upon whether a house appraises for the sale price or not. Buyers need to make sure that they are getting an accurate home appraisal and not just an appraisal that hits the right number to make the deal go through. If they dont, they may buy a house that costs more than it is worth and they will lose money if they have to sell it within a few years.

Homebuyers need to protect themselves by checking the credentials of everyone involved in the transaction and requesting that their assigned appraiser be state licensed and accredited by a national professional organization.

ppraisers with advanced accreditations have more to lose if they succumb to pressure by the agents than appraisers who are new to the field or only maintain the minimum certification required by law. They also have more experience dealing with this type of pressure and are not as affected by it.

ASA knows that lender pressure is a reality for many appraisers and supports legislation to change the system. In the meantime, however, it offers advice to consumers about how to protect themselves.

An appraisal is not the same as a home inspection. Appraisals are an opinion of value and not an assessment of individual problem areas. Get a home inspection to determine the condition of the property.

Homebuyers can ask their lender to select an accredited appraiser who belongs to a professional appraisal society. Real estate appraisers accredited by the American Society of Appraisers are required to adhere to the United Standards of Professional Appraisal Practice (USPAP), which are standards of best practice and ethics recommended by Congress. In addition, ASA-accredited appraisers have demonstrated their skills, completed extensive experience and education, and must adhere to the ASA code of ethics.

Also, homebuyers should ask their lenders for a copy of the appraisal report: a consumers right under federal law. Reading the appraisal report will give the homebuyer an idea about what similar houses sold for and what factors made the house worth more or less. Homeowners then have an idea of what fixes could add value to their homes before they sell it. 

For information about the real estate appraisal process, or to find an accredited appraiser near you, log on to www.appraisers.org/consumers or call 1-800-ASA-VALU.

About ASA
ASA is an international organization of appraisal professionals and others dedicated to the education, development and growth of the appraisal profession. ASA is the oldest and only major organization representing all disciplines of appraisal specialists, originating in 1936 and incorporating in 1952.

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