Appraisers vs Realtors – Smackdown
June 24, 2009 by Lela Davidson
Filed under Finance
On Tuesday the Appraisal Institute released a statement in response to a comment by Lawrence Yun, National Association of Realtors chief economist, who stated that the increase in existing home sales in May was less than expected because poor appraisals are stalling transactions. Yun further claimed that faulty valuations are keeping buyers from getting loans.
Bill Garber, Director, Government and External Relations responded:
“We take offense with the notion that an appraisal is only good if it happens to come in at the sales price. That mentality helped cause the mortgage meltdown to begin with. The fact that the value reflected in the appraisal does not match the sales price is not the fault of the appraisal but a result of the market today.
“It should be pointed out that neither the buyer, the seller, the Realtor nor the builder is the client of an appraiser in a typical real estate transaction. In transactions where buyers are seeking loans, our clients are the lenders. Appraisers provide lenders with objective information and value opinions that help protect them from making questionable loans and investments and help them minimize risk. However, that should not suggest a bias toward lower valuation. Appraisers reflect the market, and sometimes, the markets don’t act like we want them to or hope they will. Nonetheless, competent and professional appraisers understand this and develop credible estimates of value that ultimately help ensure that lenders loan the proper amount, buyers don’t pay too much and sellers get a fair price.
“In these complex markets, it is particularly important that lenders use only the highest caliber of appraisers. Members of the Appraisal Institute holding the MAI, SPRA or SRA designation have met extensive experience and education requirements and must comply with a strict Code of Professional Ethics and Standards of Professional Appraisal Practice.”
The Appraisal Institute is a global membership association of professional real estate appraisers, with over 25,000 members and 91 chapters throughout the world.
Image Credit: dno 1967, Flickr
