Encouraged by strong price increases and hot sales this spring, increasing numbers of owners are listing their homes for sale. But chances are good that millions of owners are making wrong assumptions about the value of their homes, according to two new studies. Wrong valuation assumptions can lead to bad decisions about whether to sell, […]
New Studies Illustrate How Consumers Misjudge Home Values
Encouraged by strong price increases and hot sales this spring, increasing numbers of owners are listing their homes for sale. But chances are good that millions of owners are making wrong assumptions about the value of their homes, according to two new studies. Wrong valuation assumptions can lead to bad decisions about whether to sell, […]
Tips for First-Time Homebuyers
With the summer real estate season upon us, many Americans are considering purchasing a home over the next few months. The total mortgage originations market is estimated to be around $1.2 trillion in 2015. With that in mind, the Independent Community Bankers of America® (ICBA) and the nation’s more than 6,000 community banks are on […]
Tips for First-Time Homebuyers
With the summer real estate season upon us, many Americans are considering purchasing a home over the next few months. The total mortgage originations market is estimated to be around $1.2 trillion in 2015. With that in mind, the Independent Community Bankers of America® (ICBA) and the nation’s more than 6,000 community banks are on […]
Top 5 Government Policies that Everyone Should Know before Buying Their First Home
FOX Business Network’s Trish Regan, host of The Intelligence Report, weighs in the top 5 government policies that everyone should know before buying their first home: Hold onto your home for two years! If you sell after 24 months, you’ll be exempt from capital gains taxes up to $250K for a single person and $500K for […]
Existing Sales Trend Up for First-Time Buyers
Although existing home sales decreased in November, the share of sales for first-time buyers increased to the highest level since October 2012. Existing home sales decreased 6.1 percent in November, but were 2.1 percent above the same period a year ago. The National Association of REALTORS (NAR) reported November 2014 total existing home sales at […]
Existing Sales Trend Up for First-Time Buyers
Although existing home sales decreased in November, the share of sales for first-time buyers increased to the highest level since October 2012. Existing home sales decreased 6.1 percent in November, but were 2.1 percent above the same period a year ago. The National Association of REALTORS (NAR) reported November 2014 total existing home sales at […]
Share of First-Time Buyers Falls to Lowest Point in 27 Years
Despite an improving job market and low interest rates, the share of first-time buyers fell to its lowest point in nearly three decades and is preventing a healthier housing market from reaching its full potential, according to an annual survey released recently by the National Association of REALTORS®. The survey additionally found that an overwhelming […]
Share of First-Time Buyers Falls to Lowest Point in 27 Years
Despite an improving job market and low interest rates, the share of first-time buyers fell to its lowest point in nearly three decades and is preventing a healthier housing market from reaching its full potential, according to an annual survey released recently by the National Association of REALTORS®. The survey additionally found that an overwhelming […]
For Your Clients: What Is Good Advice on a Home Appraisal Worth to You?
One of the required services when buying or selling a home involves hiring an appraiser. So I was excited to receive the latest news from the Appraisal Foundation, the nation’s foremost authority on the valuation profession, has additional resources for consumers.
According to the foundation, effective January 2014, rules adopted by the Consumer Financial Protection Bureau (CFPB) allow borrowers to receive copies of all valuation products ordered with their loan (even if the lender did not rely on them) three days prior to closing.
Consumers should know that various valuation products (appraisals, AVMs, BPOs) may produce different values and cause confusion for borrowers.
The foundation believes borrowers should understand the differences between the valuation products they may receive before closing on a home loan and the relative reliability and applicability of each product. When reviewing valuation products, keep in mind that:
• An Appraisal is an opinion of value performed by a professional state-licensed or -certified appraiser. It complies with the Uniform Standards of Professional Appraisal Practice (USPAP), which requires appraisers to be independent, objective, and impartial. An appraiser must remain unbiased and produce an opinion of value that is credible, or worthy of belief. An appraisal by a competent professional appraiser is the most reliable of all valuation products.
• An Automated Valuation Model (AVM) is a computer-generated estimate of a property’s value that a lender might use in some circumstances to assist in evaluating the collateral for a mortgage. The output of an AVM is heavily dependent on the quantity and quality of the data input. With proper use, an AVM can help support the findings of an appraisal, but when used alone its output may not be credible.
• A Broker Price Opinion (BPO) is typically prepared by a real estate broker and is another tool a lender might use to evaluate the collateral for a loan. A BPO, as originally intended, does not comply with USPAP, and real estate brokers are not obligated to comply with USPAP and its corresponding appraiser independence requirements. BPOs were designed for brokers to assist home buyers and sellers in arriving at a list or purchase price.
• A Comparative Market Analysis (CMA) is similar to a BPO and is commonly prepared by a real estate agent to help decide on an asking or offering price. Like a BPO, a CMA does not comply with USPAP and real estate agents are not required to comply with USPAP.
For more information, or to review or download the foundation’s free “Guide to Understanding a Residential Appraisal,” just visit www.appraisalfoundation.org.