Tuesday, December 30, 2014

Fannie & Freddie Rolling Out New Appraisal Comparable Sales Guidelines

Appraisers have had to be ultra careful over the last few years. When I first started selling homes it seemed like you could wink at an appraiser and they would bring in the value for a purchase. Those days are long gone. We couldn't hardly speak with them for a few years. Now at least we can chat with them, point out improvements, give them our comparable sale information.

All good, right?

Well, be prepared. Fannie Mae & Freddie Mac are bringing to the table (January 26th) what they call Collateral Underwriter. It's an okay concept, but it will likely make the appraisal process more costly and lengthier.

A computer program will generate up to 20 comps. They will be categorized by risk factors. The appraiser will be questioned about their comps used. The ones with the least risk factors will be preferred over the higher factored ones. HOWEVER, the lower ones may be in a completely different neighborhood.

Here in Santa Clarita Valley, we use tracks to find our comparable sales. We sometimes go outside the immediate track and look for others that are same age, size, amenities, and such.

In San Fernando Vally, Los Angeles, etc., we use Thomas Guide map numbers, neighborhoods, boundaries, age, size, amenities, etc. It's an older community that originally were tracks for sure!

At any rate, there is suggestion that we will be running into some appraisal value issues due to this new guideline.

Just truly a beware. Buyers and Sellers alike. It will affect both sides. Costs, time, lower values.

Just a little wrench thrown into the mix!

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