Appraisers Add Form to Help Value ‘Green’ Homes

The Appraisal Institute recently released a form to help appraisers factor in energy-efficient home features when valuing homes. The forms can also be used by real estate agents in describing “green” properties on the MLS, the Appraisal Institute notes. 

Everything from a home owners’ energy efficient appliances to solar panels may now get more attention from appraisals with the added form.  

The new form allows appraisers to identify and describe a home’s green features. It will serve as an optional addendum to Fannie Mae Form 1004, which is the appraisal industry’s mostly commonly used form for mortgage purposes, used by Fannie Mae, Freddie Mac, and the Federal Housing Administration. 

“We hope lenders, home builders, real estate agents, and home owners will take advantage of this new tool,” Joseph C. Magdziarz, president of the Appraisal Institute, said in a statement. “Mortgage lenders who want to see energy features analyzed should request the green addendum to be included with Form 1004. We also encourage lenders to provide the green addendum to home owners so they can fill it out and provide it to their appraiser. If a new home is being appraised, home builders can use the addendum to provide data to appraisers. Real estate agents also can use the data to help populate the MLS.”

 Source: “Appraisal Institute Issues Form to Help Real Estate Appraisers Analyze ‘Green’ Features,” RISMedia (Sept. 29, 2011)

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“Low Appraisals” are killing sales!

The National Association of REALTORS® reported that 16 percent of real estate professionals surveyed in June reported a cancelation in a sale, mostly due to a large number of low appraisals. 

Many real estate professionals are watching deals unravel, with some appraisals coming in 10 to 20 percent — or even more — below the accepted offer. Our Placerville, El Dorado County region has been no exception during the past 3 years. Generally, it seems some appraisers are not familiar with the area or don’t do necessary research?  

“Over the past decade, finding ‘comps’ that accurately reflect values has been a challenge as values rose quickly during the boom and fell just as fast during the bust,” according to a recent article by RISMedia, 5 Ways to Fight a Low Appraisal. “Discounts paid for foreclosures and short sales have created a dual price structure between ‘normal’ and distress sales.”

Obviously one of the easiest solutions when a low appraisal comes in: Ask the seller to agree to a lower price? But when that doesn’t work, RISMedia offers some tips for fighting low appraisals. 

Read more tips from RISMedia on how to fight low appraisals. 

Source: “5 Ways to Fight a Low Appraisal,” RISMedia (Sept. 7, 2011)

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Appraisals Continue to Hamper Sales!

Low appraisals that come in below the purchase price are still delaying closings or killing some sales contracts, real estate professionals say in a survey from April.

One out of 10 real estate professionals–or 11 percent–say that low appraisals are causing home sales contracts to fall through. An additional 10 percent say low appraisals are delaying closings, according to an April survey by the National Association of REALTORS®. About the same number of real estate professionals reported the problems with low appraisals in a March survey.

About 14 percent of real estate professionals reported that appraisals below the purchase price are requiring extra negotiating in order to get the deal closed.

“Short sales and foreclosures are still priced too high by the lenders, who do not believe the agents information concerning actual market conditions,” said one real estate professional in the survey comments.

Source: “Appraisals Still Kill Home Sales,” (May 25, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at:


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Are you getting your money’s worth with the appraisal?

Despite Federal Reserve regulations that took effect April 1 requiring lenders to pay appraisers fair fees, many appraisers say they are still offered $200 to $250 by lenders for work billed to consumers at $450 or more.


Last year’s Dodd-Frank financial reform law mandated that appraisers receive fees that are “customary and reasonable” for their local market areas, yet the Appraisal Institute says that is not happening.

While a portion of the difference between what consumers are billed and appraisers are paid goes to the management companies that connect lenders with local appraisers and take a percentage for their services, often times lenders make a profit from the appraisal as well.

Home buyers should care about this for several reasons. For starters, accurate appraisals are a concern for consumers, as appraisals can be deal-breakers if the appraisal comes in too low. When performed competently, appraisals can be accurate measures of the equity in a home when the homeowner refinances or seeks a second mortgage.

Read the full story:

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“Low Appraisals” Jeopardize Home Sales!

Ten percent of real estate professionals say they’ve had sales canceled because appraisals came in below the price the buyer agreed to pay, according to a National Association of REALTORS® survey conducted in January. What’s more, another 15 percent say contracts had to be renegotiated because an appraisal came in too low.

Home builders say low appraisals are killing deals for them too. One-third of home builders say low appraisals have jeopardized sales for them (up from 26 percent in 2009), according to the National Association of Builders.

When appraisals come in low, sellers have to drop the sales price or buyers have to come with more cash, or the deal gets killed.

Foreclosures and a new appraisal rule for lenders are other factors contributing to low appraisals, housing experts say. A new appraisal rule that went into effect in 2009 aims to lessen lenders’ ability to influence appraisers but has led to more outsourcing of appraisals to firms that may not be as familiar with the neighborhoods in that area.

We haveexperienced this problem here in the Sacramento and Placerville, California regions. Many times the appraiser is from outside our county and unfamiliar with the subject market or perhaps is not experienced or qualified? 

More information at source of this article: “What’s Behind Home-Sales-Scuttling Low Appraisals?” USA Today (March 1, 2011)

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