The Rules of Real Estate Seem to be changing. The big rule used to be Location, Location, Location and now is Value, Value, Value. So lets discuss “Value”, there has been a recently adopted program call HVCC, it is a new communication protocol where loan officers and Realtor can no longer discuss property conditions with an appraiser.
The rule makes it impossible to have a conversation about items that could have been missed. This has everyone in a uproar, including the President of the National Association of Realtors. This system is not working well. It is delaying appraisal times and putting appraisers that have no experience or knowledge of local markets on assignments. It is also creating that third tier of expense in the process. Now someone is assigning the appraiser and collecting a fee for scheduling. This was not involved in the old system. So this planned improvement is not working to improve anything. In fact it is costing more, bringing in inferior results for the public, and refusing to let the market grow, something that is vital to our economic recovery.
I recently saw a transaction where the client was putting more than half the value of the property down on a property that was only on the market for 12 days and that counts the days of negotiation and the appraisal came in lower that the agreed upon price. The difference in value was only about 2.5 percent of the total but this but the buyer and seller back at the negotiation table. It put the loan in flux and creates a market that has no possibility to rise even if the market influence is positive. Yes, where can the market go if the Appraiser disagrees with someone who has more that half the money as a down payment.
Here is my advise, there is power in knowledge, just be aware of this. This is just one more twist in a crazy real estate market. The professionals are doing all they can to bring this new Rule to the Attention of all our elected and administrative leaders. Move forward in good faith and buy the home you want to live in, this kind of silly market movement will pass and you will be living in a home you may not have an opportunity to own at some time in the future.
George Kenner is a Licensed California Real Estate Broker with 19 years of industry experience.