Home Appraisals - A New Problem?

Home appraisals have long been part of the home buying process. They are ordered by the bank or mortgage lender to ensure that they are covered should the 'new' homeowner walk away from their loan and forcing the lender to foreclose on the property. They typically will lend up to 80% of the property's appraisal value, or 80% of the agreed-to price, whichever is less. In the past appraisals have come in higher than the selling price of the home, so they have been simply part of the process, and not interfere with the transaction. More recently, however, they have come in lower than the price of the home, causing problems.

What are the options, for Buyers and Sellers? SmartMoney.com recently put it all together in an article that's a must-read for both Buyers and Sellers...... Here.

The Home Valuation Code of Conduct

The Home Valuation Code of Conduct (HVCC) sprang out of the belief that, at least partly, the fault of the credit crises lies on the coercion of appraisers, by banks, to value homes higher than the houses warrant. The HVCC sets up a new layer of middlemen who will be immune from pressure from the banks. Appraisers will work for these middlemen.

Some feel that the cure is worse than the disease, causing harm to the appraisal industry and drive many appraisers out of the system. This article is from the Appraisal Press.