An analysis by the National Association of Realtors (NAR) indicates that the implementation of the Home Valuation Code of Conduct (HVCC) appears to be having adverse impacts on the housing markets. Recently, NAR Research sent a survey on this topic to a random sample of approximately 40,000 NAR members which generated 3,600 responses. An analysis of realtor responses follows.
Approximately 76 percent of realtors representing buyers or sellers indicated that the time to obtain a completed appraisal increased after May 1. Among those indicating an increased appraisal time noted additional time to get to closing with 69 percent saying it increased the time to close by more than a week.
Lost sales due to a delayed appraisal were reported by 37 percent of realtors attempting to complete home sales, with 16 percent reporting one lost sale and 20 percent reporting more than one lost sale.
The number of appraiser members reporting they obtain over 50 percent of assignments from appraisal management companies (AMCs) increased from 13 percent to 40 percent after May 1st.
Both realtors and NAR appraiser members noted a decrease when it comes to the quality of appraisals. NAR appraiser members also noted a reduction in quality due to reduced timing.
NAR appraiser members reported a significant number of assignments in unfamiliar geographic areas. Similarly, 71 percent of realtors noted an increase in the use of out of area appraisers. Among individuals responding affirmatively, increase in use of out of area appraisers was:
► 53 percent noted an increase of up to 25 percent
► 27 percent noted an increase of 26 percent to 50 percent
► 20 percent noted an increase of over 50 percent
Approximately half of NAR appraiser members reported a reduction in the fees received.
More than 70 percent of NAR appraiser members reported that consumers were paying higher fees.
For more information, visit www.realtor.org/HVCC.