New Guidelines for Home Appraisals

Even with better interest rates and(hopefully) credit freeing up a bit, there is a new, tougher look being taken by banks when ordering appraisals on homes that have been sold.  The secondary mortgage market wants a firmer assurance of the value of a home prior to purchasing the loan.

So appraisers are being told to look more carefully at comparable sales – which is a tall order, because in a depreciating market comparable sales are further back in time and further away geographically from the subject property.

It’s kind of paradox, since there are fewer comps to look at and yet the banks want more comps.   I really am glad I am not an appraiser.

The thing to stay aware of here for both buyers and sellers is that the sale price of a home is not rock-solid just because both parties agree to it.   Things may change when the appraisal comes in.

So – for sellers, as I’ve recommended before – get an appraisal before listing your home and for buyers, have your Realtor do a thorough analysis of the market before making a bid.