Coastal Real Estate and Lifestyles

It seems like buyers and sellers ought to know about a new rule affecting appraisals…which may affect values differently…which may affect loan approvals…which may affect loan contingency timing, loan lock timing, and possibly even successful escrow closings. 

The Home Valuation Code of Conduct (HVCC) goes into effect on May 1, 2009 for all Freddie Mac and Fannie Mae loans.  I haven’t heard too much about it yet, but I expect I will in the next several months.  This post from Matrix provides a interesting overview.  So just consider this a heads up at this point so you’re aware that appraisal procedures for your refinance and home purchase will be changing.

As pointed out in the RESPA Lawyer Blog, “Consumers and state & federal regulators need to watch very carefully to see what impact the new HVCC rules will have on the real estate home buying and refinancing process.”

 As a buyer, your offer strategy could include discussion with your Realtor about the pros and cons of adding in a separate appraisal contingency.  Pro-active measures would call for paying attention to whether the appraiser knows the local market or not, when the appraisal is done, getting a copy, reviewing it for accuracy, asking questions if anything doesn’t make sense, and discussing what the results mean for any future negotiations and, of course, a successful close of escrow.  Again, each transaction is different, so that’s for you and your Realtor to understand and implement the best strategy for you and that particular property.

 If you have additional information about this, please share.