One in Three Builders Lose Sale Due to Faulty Appraisal
One in Three Builders Lose Sale Due to Faulty Appraisal
One in Three Builders Lose Sale Due to Faulty Appraisal
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December 9, 2011 (Chris Moore)

One out of three home builders reported losing the sale of a brand new home in the last six months because the appraisal was less than the selling price of the home according to the National Association of Home Builders (NAHB).

According to the nationwide study conducted by NAHB, appraisals of brand new homes are being compared to distressed properties in the effected areas, many sitting vacant and in disrepair, resulting in an appraisal that in many cases is less than the cost of construction on the new home.

Sixty percent of the builders who responded to the survey reported they had experienced appraisals that were below their contract sales price. Of the builders who had encountered a faulty appraisal, 53 percent said the amount that the new home was appraised for was actually less than the cost of construction

“The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

NAHB, along with its partners in the appraisal industry, housing finance industry, and the real estate and housing sectors has held four appraisal summits with bank regulators in Washington to find solutions and develop realistic valuations based on sales that are truly comparable.

“Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility or harm aspiring home owners and move-up buyers,” said Nielsen. “We will continue to work with all stakeholders in this debate to find solutions.”

NAHB believes the faulty appraisal practices threatens to prolong the current housing downturn as falling appraised values for land and subdivions has resulted in financial institutions refusing to lend to developers and builders or to demand additional equity or call performing loans.

“This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market,” Nielsen added.

Tags: NAHB, appraisals, home builders, new homes, faulty appraisals, distressed properties, contract sales price, lenders

Source:
NAHB

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Estimate your monthly mortgage payment
Auto Loan
Calculator

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Learn About
Mortgage Loans

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15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
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December 9, 2011 (Chris Moore)

One out of three home builders reported losing the sale of a brand new home in the last six months because the appraisal was less than the selling price of the home according to the National Association of Home Builders (NAHB).

According to the nationwide study conducted by NAHB, appraisals of brand new homes are being compared to distressed properties in the effected areas, many sitting vacant and in disrepair, resulting in an appraisal that in many cases is less than the cost of construction on the new home.

Sixty percent of the builders who responded to the survey reported they had experienced appraisals that were below their contract sales price. Of the builders who had encountered a faulty appraisal, 53 percent said the amount that the new home was appraised for was actually less than the cost of construction

“The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

NAHB, along with its partners in the appraisal industry, housing finance industry, and the real estate and housing sectors has held four appraisal summits with bank regulators in Washington to find solutions and develop realistic valuations based on sales that are truly comparable.

“Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility or harm aspiring home owners and move-up buyers,” said Nielsen. “We will continue to work with all stakeholders in this debate to find solutions.”

NAHB believes the faulty appraisal practices threatens to prolong the current housing downturn as falling appraised values for land and subdivions has resulted in financial institutions refusing to lend to developers and builders or to demand additional equity or call performing loans.

“This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market,” Nielsen added.

Tags: NAHB, appraisals, home builders, new homes, faulty appraisals, distressed properties, contract sales price, lenders

Source:
NAHB

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

December 9, 2011 (Chris Moore)

One out of three home builders reported losing the sale of a brand new home in the last six months because the appraisal was less than the selling price of the home according to the National Association of Home Builders (NAHB).

According to the nationwide study conducted by NAHB, appraisals of brand new homes are being compared to distressed properties in the effected areas, many sitting vacant and in disrepair, resulting in an appraisal that in many cases is less than the cost of construction on the new home.

Sixty percent of the builders who responded to the survey reported they had experienced appraisals that were below their contract sales price. Of the builders who had encountered a faulty appraisal, 53 percent said the amount that the new home was appraised for was actually less than the cost of construction

“The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev.

NAHB, along with its partners in the appraisal industry, housing finance industry, and the real estate and housing sectors has held four appraisal summits with bank regulators in Washington to find solutions and develop realistic valuations based on sales that are truly comparable.

“Major reforms in appraisal practices and oversight are needed to ensure that appraisals accurately reflect true market values and don’t contribute to price volatility or harm aspiring home owners and move-up buyers,” said Nielsen. “We will continue to work with all stakeholders in this debate to find solutions.”

NAHB believes the faulty appraisal practices threatens to prolong the current housing downturn as falling appraised values for land and subdivions has resulted in financial institutions refusing to lend to developers and builders or to demand additional equity or call performing loans.

“This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more home owners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market,” Nielsen added.

Tags: NAHB, appraisals, home builders, new homes, faulty appraisals, distressed properties, contract sales price, lenders

Source:
NAHB

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.