Wall Street Journal Reports: Appraisals Weigh Down Housing Sales;
Buyers Agency USA takes Formal, Strong Stand for its Clients.

In a copyright article in the The Wall Street Journal on August 12, 2011, writers S. Mitra Kalita and Carrick Millenkamp report that weak appraisals, stemming mainly from a mixture of inexperienced appraisers and the use of "distressed sales" as comparables, has lead to many home sales being quashed. Lenders are pressuring appraisers to come in with lower estimates, it states. Some states, such as Illinois, Missouri, Nevada and Maryland have considered legislation that would bar appraisers from using distressed sales when drawing estimates. In fact, it is basic appraisal understanding to ignore non arms-length transactions as well as those that are distressed. The appraisers of late appear to be assuming the opposite - that the distressed properties lost to foreclosure and dumped by the lender - constitute the mean, therefore the value.

The article further states that seasoned, professional appraisers that operate under long-standing professional practices are being stepped over by lenders to select newer, inexperienced (read: less expensive?) appraisers and many times appraisers who are not from the region and have no local knowledge. They apply what they think they know from values in less affluent communities to very fine-home communities. In several instances in Missouri, comments by appraisers have even included class-warfare comments by appraisers suggesting wealthy communities and owners deserve it.

New laws prevent lenders and agents from contacting the appraiser directly, making any appeal based on facts nearly impossible. However, that does not entirely release the appraiser from the requirement of professional conduct. 

Buyers Agency USA strives to inform its clients (whether buying a home, or selling their existing home) of these facts, and believes that such professional misconduct by appraisers, which can lead to families missing school registration or destroying an entire transaction, deserve to face liability for their unprofessional preparation and appraisal malpractice.

Buyers Agency USA plays an active role in assuring that any lender or appraiser that engages in haste, mistakes, using improper comparables, etc. shall be held accountable and such behavior will be immediately reported to the state attorney general and the state professional licensing board for appraisers for investigation.

Buyers Agency USA also promotes the concept of placing the lender and the appraiser on notice of the expectation of professional conduct and to execute any appraisal using best practices - and that Buyers Agency USA will report anything less than professional to the governing authorities of that state. 

For a copy of the WSJ article, Click Here