About Hall County, GA

Let's first define good shall we? Good does NOT mean make the number work so the loan will close!

BEFORE you take out your next loan......do some checking into the BANK first, do they use appraisers whose fees have been cut in half? Do they use Appraisal Management Companies (they normally pay appraisers well less than their normal fee and charge the banks more than we would).

Appraisers sole mission in life is to protect the BANK's RISK where a loan is involved. We also protect buyers and sellers by analyzing and reporting the REAL market value so that you do not pay more than the home is worth or you do not under or overprice your home.

A big part of the housing crisis is due to faulty appraising. Many know that the BANKS, Realtors and Mortgage Brokers dictated TO the appraiser what the value should be on the appraisal report. This is 100% backwards and RISKY to say the least. Our housing crash is proof of this!

Thus the inception of the HVCC. Appraisers must be independent from all who have a vested interest in the property and get back to the real job of reporting the true market value for the subject property. Or to put it another way if YOU default on your loan, what can that home be sold for by the bank to get it off their books. Banks have a bloodshed on their hands as the appraised value in many cases was inflated. Why? Because appraisers were backing into the number since the lenders would give them the ESTIMATED VALUE right on the appraisal request form and expect them to come up to that number! I am NOT saying all appraisers played that game, but trust me many did!

Now appraisers have to do what I call BLIND Appraising. They have no numbers to work toward, which is a GOOD thing, they must actually use their appraisal skills and report the market in an accurate way to come up with their opinion of value. Remember we do not determine value, we report it to the client after we conduct a thorough analysis of the market. The MARKET determines value not the appraiser.

So my question to all END USERSof appraisals, don't you think it is worth the FEE appraisers charge to produce a credible, meaningful report? I think so because a faulty appraisal report on either side of the value equation can have significant financial negative impact.

Just as an example: If you live on Lake Lanier and you have an appraiser from Atlanta who does not cover this lake with any regularity appraise your lakefront home, chances are very HIGH that the appraised value will be off and I mean WAY off. SAME thing holds true for any appraisal in any given neighborhood. If an appraiser for example does not know that people pay more or less for a home in a given SCHOOL district for example, the appraised value will be off.

Therefore it is imperative that the appraiser know the market in which they appraiser and better yet LIVE in that same market area.

So you do have control buyers and sellers and homeowners. Do not use banks that feel cheapest is the best, because in this world you get what you pay for and in this case it could financially hurt you BIG time!

A few extra dollars to get an accurate appraisal report is WELL worth it in the end.

Thanks for stopping by my blog!

Mary Thompson

www.marytappraisals.com

HUD has stated that in addition to adopting HVCC language, that appraisers should be paid their normal market fees for FHA appraisal products.

Well after my discussion with a well known. long standing Appraisal Management Company who most appraisers know as they have been around forever, here are their exact words to me as of yesterday "

"The new national debate will be over exactly what is "normal", and as I understand it, that is a question that will be answered market by market. "

This same Company also tells all appraisers that Appraisers set their own fees, they have control over their fees the AMC does not......That language sticks in my craw BIG time. Why? Because if Appraisers set their normal market fees they will NEVER get work from AMC's. AMC's DO set the appraisers fees as the appraiser is forced to reduce their fees in order to get work from them. I know this because I do NOT get work from them because I refuse to work for 1/2 my NORMAL Fee. I complete a very thorough report and I know the value of my work.

BUT here is the issue.....If HUD asks AMC's what is the normal fee for FHA appraisals in their given market, that NORMAL is reduced by anywhere from $100-$150.00 per report because that is where they set their FHA fees in order to get work from AMC's. So HUD may in error think that this is the true NORMAL fee, when in reality it is not. If they were to call an appraiser and ask what is your normal fee for FHA appraisals they would give you a totally different number than if they were to ask what is your fee for an AMC..

So Realtors, Buyers, Sellers and BANKS need to know the value of a good appraisal and that one has to pay the fee for a truly accurate and meaningful report.

Please see my other post below about what you can do to help with this problem:

http://activerain.com/blogsview/1304602/realtors-you-can-take-control-of-the-appraisal-process-and-hvcc-by-doing-just-one-thing-

Our mission in life is to protect the BANKS risks, this is HUGE...Let me repeat Appraisers exist in this world to protect the Banks Risks, by analyzing and reporting their findings. WE DO NOT DETERMINE VALUES. This being said would you want an appraiser whose fee has been cut in half doing apprasials for YOUR BANK? I think not!

The trend is to standardize all appraisal reports and automate them as much as possible, based upon software that will essentially produce reports with a great deal of numerical analysis, unbiased reporting and market based adjustments for variances in comparable sales vs. the subject property. BUT you cannot automate the entire process.

SOME AMC's want to automate and standardize our process as much as possible so that the time it takes to complete a report is cut in half and yes you guessed it keep our fees LOW. But when you appraise in an area like ours, you are not dealing with cookie cutter properties and you cannot automate the entire process. You still have to be adept at determining which neighborhoods are really comparable, which sales are really comparable and to do this you have to know your market WELL.

There is a shift toward using appraisers who live close to the subject property and who regularly appraise the area. I am all for that shift. When appraisers drive 30+ miles to homes they just do not know the ins and outs of that particular county and neighborhood, unless they work in the area on a daily basis. But it happens all the time as that is where the work is for many appraisers.

So my request of HUD is this, do not use AMC's fee data to determine what is normal market rate. It is far from normal. They essentially drive down and dictate our fees FOR us as they pit appraiser against appraiser for the best fees. We do not have control of our fees with AMC's. There are a very few AMC's that do pay FULL fee to apprasiers and I commend them for this. I hope most banks work with them. SOLIDIFI is one of them. www.solidifi.com They do not feel the need to dictate fees or dictate every step of the appraisal process to the appraiser and how it should be completed. They look for experienced, well seasoned appraisers to get the job done....as it should be!

It is very important that all parties understand the importance of good appraisal reporting See post below on this subject.. and YES..appraisers need to be paid for their expertise.

http://activerain.com/blogsview/1312887/buyers-sellers-realtors-banks-do-you-really-understand-the-value-of-a-good-appraisal-

The housing industry will rise again or fall based upon the quality of a GOOD appraisal. BY good I do not mean make the number work, I mean to report the REAL value of the property in question. Remember we are protecting the Bank's RISK.

Realtors you have more control than you realize in this business or maybe you already know this....

With all the complaints about appraisals killing deals and coming in low and in turn keeping the real estate market depressed, here is ONE single thing you can do to try to make an impact in your business.

I know that many of you recommend mortgage brokers or Banks to your clients, well when you do, find out via the broker or directly from the BANK if they use AMC's (Appraisal Management Companies). There are still plenty of Lenders who do NOT use AMC's. A few of them are Guaranty Bank, Fairfield Mortgage, Fidelity Bank, Suntrust Bank, Shelter Mortgage and Guaranty Mortgage Services right here in Georgia and I believe these Banks originate loans in other states as well.

So do some checking around in your areas and see which Banks and Mortgage Brokers are NOT using AMC's. There are some good AMC's out there but most pit appraiser against appraiser and they will use the appraisers who charge the least amount of money, regardless of experience and quality reporting.

Remember even if these other large Banks like Bank of America and Wells Fargo who DO use AMC's have better rates for your clients, what difference does it make if the appraisal kills the deal for them. So they need to consider this fact when selecting a bank.

Realtors, you can have a huge impact on this problem by forcing the BANKS who DO use AMC's not to use them since you will not be sending your client their way any longer!

By using BANKS who do not use AMC's, chances are far greater that you will be getting a quality appraisal report and the appraisers will know the AREA in which they appraise. WHY? Because the Banks who do not use AMC's pay the appraisers their market fee and because most of these banks have hand selected the appraisers that they have worked with for years and they do not want to lose that relationship.

The HVCC still provides a wall of independence so that there is no pressure involved to HIT a number, which is a good thing so that people do not pay more than the home is worth, but at least the banks know that these appraisers have been around for years and they know they produce quality reports and thus the reason for hand picking them. This is also the reason they DO NOT take their chances with AMC's. They use a non production work force to order the appraisals within the bank. HVCC does not require banks to use AMC's like so many people thought.

So use the CLOUT you have as REALTORS and do some research. Tell your clients that you go beyond the call of duty by making sure that when the property is appraised it is by someone who knows the area and who has the experience to get the job done and who is NOT being paid cut rate fees to perform the job at hand. Trust me when I tell you appraisers who get paid 1/2 their rate will CUT corners, I know because I have reviewed their reports and they are scarry to say the least.

I know being a Realtor these days is ONE TOUGH JOB...but you CAN make a difference by exerting pressure or diverting business where it needs to be and your clients will thank you for it!

I am a true believer in the "You get what you pay for" philosophy and in this case the poor appraisals many times are due to the cut rate fees the AMC's are paying the appraisers and sending appraisers to uncharted territories because they have the lowest rate for that county.

When I woke up this morning I was a bit nervous. Today was our bi-annual golf tournament with Southern Loss Association at Chatuea Elan and it was about 40 degrees. Thankfully the sun came out and it was a beautiful day. Selling mulligans we were able to raise $930 for the Susan G Komen foundation. It was a beautiful scene.

Is it okay? Can I toot my own horn please???
Airing tonight 10/21/09 on Their Evening Edition. Tune in if you wish!

Marina at full pool! What a difference, beaches and sand bars could be seen from this location last year!

Last October I was interveiwed by The Weather Channel due to our severe drought and how that would impact Real Estate Values. It was not a pretty picture as we were 18 feet below full pool at that time.

I contacted The Weather Channel last week when we hit full pool to tell them the good news (we rose 18 feet in one year) and that they should do another story about Lake Lanier hitting full pool and what good news that is for all concerned. Well, they contacted me and today at Aqualand they are conducting an interview with myself and Len Jernigan of Aqualand Marina , to talk about Real Estate now and Business now with the lake being full. Should be a much happier story!

The only bad news is the average Lake Home Sales price declined 25% from 7/08 - 10/08 as compared to the same time this year. But the GOOD news is that we have seen 2 times, yes double the number of sales in this same period on Lake Lanier and we have 19 homes pending, of which 30% went under contract in October and 80% went under contract in the months of September and October combined.

I plan to tell them that we have 3 things in our favor, dock permits being gone by the end of October, water levelsabove full pool and the market seems to be stabilizing.

I also plan to tell them that Lake Levels seem to be tied to the DOW interestingly enough, whether that little tidbit will make the cut, who knows!

So I will let you know how it all turned out and when they plan to air the show.

Have a great day everyone. Remember if you need a current value on your Lake Lanier home you know who to call.

Mary Thompson