RISMEDIA, Feb. 20, 2007- Ninety percent of real estate appraisers feel pressured to "hit the number." That is the finding from an October Research survey of approximately 1,200 appraisers. That number is up sharply from the 2003 survey, which reported that 55 percent of appraisers felt pressured by mortgage brokers, lenders, real estate agents and homeowners to reach a predetermined value.
The American Society of Appraisers (ASA) believes that lender pressure is an ongoing problem for appraisers and is committed to supporting legislation to reform fraudulent practices in the mortgage lending industry. ASA, along with the Appraisal Institute and the American Society of Farm Managers and Rural Appraisers, are actively supporting legislation that seeks to combat predatory lending and mortgage fraud.
"I am not surprised that so many appraisers surveyed still feel pressured by members of the lending industry to hit a particular number to close a deal," said Mike Evans, a Fellow of the American Society of Appraisers. "There is currently little regulation or incentive that stops this type of behavior from taking place."
ASA appraisers support the consumer's right to receive a loan based upon an accurate appraisal. It is in the homebuyer's best interest to receive an accurate appraisal to ensure that they are not over-paying for their loan.
As the only independent, objective third party involved in a real estate transaction, the appraiser can perform an important role in protecting the homebuyer and financial institution. ASA cautions homebuyers to try to make sure that their appraisal is accurate and not a result of pressure by lenders to come up with a value that makes the deal go through. The following are a few things consumers should know to protect themselves in a real estate transaction.
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 your property.
Home buyers can request that their lender 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 ethics recommended by Congress, as well as a code of ethics.
Home buyers should ask their lender for a copy of the appraisal report. It is a consumer's right under federal law.
If you have any concerns about the purchase price or the appraisal, ask the bank for contact information to speak with the appraiser directly.
Home buyers can hire an independent appraiser if they want a second opinion.
"Home buyers should take an active role in scrutinizing the practices of everyone involved in their home purchase," said Evans. "If they feel that agents are overly aggressive in wanting the deal to go through, or if the price of the house they want to buy isn't comparable to other similar houses in the neighborhood, they should be wary."
ASA reminds consumers to hire a qualified and professionally accredited appraiser.
For information about real estate appraisals, or to find an accredited appraiser near you, log on to www.appraisers.org or call 1-800-ASA-VALU.
