Some lenders have started mandating that appraisers provide as many as eight to 10 comparable transactions in their reports, which the National Association of Realtors called “excessive” in an Oct. 11 news release. They alleged that the requirement was affecting home sales.
Prior to the housing crisis, lenders typically required appraiser reports to include a minimum of three comparables when providing an opinion of value for a property.
Now, appraisers allegedly are being pressured by lenders and appraisal management companies to provide additional comparables, which “almost guarantees the use of distressed sales as comps in many cases,” NAR noted in a news release.
An online survey conducted by NAR in September showed that 11 percent of realtors indicated a contract was cancelled during the last three months due to an appraisal, and an additional 15 percent of surveyed realtors said a sale price was renegotiated to reflect a lower appraisal. However, 65 percent of realtors reported no contract issues connected to home appraisals.
“All home valuations should be made without undue pressure from any source,” Moe Veissi, NAR president, said in the news release. “Even so, buyers, sellers and agents are free to ask appraisers to consider additional data and to correct errors, or discuss unique aspects of the home, the neighborhood or properties used as comps,” he noted.
See the full NAR release for more information.