The comment period for the Home Valuation Code of Conduct just ended yesterday. As a fee appraiser that is trying to build a successful business I am very dismayed by the first draft and hope to see significant changes now that the comment period is over.
This code of conduct is a result of lawsuits filed by Andrew Coumo the Attorney General for the State of New York. It is attempting to ensure that appraisers provide an accurate value opinion without being pressured by a lender/mortgage banker/broker.
This make sense - an appraiser should give their opinion of value and not have to "hit a number".
Unfortunately, the code of conduct takes away the appraisers ability to market their company and build relationships to increase their business. Currently the code is written to allow Appraisal Management Companies an opportunity to work as the middle man
for every transaction of course receiving a large portion of the appraisal fee (typically 40%).
In this scenario providing a quality product and good service is not rewarded. There are many appraisers in todays market that see their job as filling out a form. These are the people that do the minimum to get the job done. Look at your last appraisal
- when it asks for description of the house does it say "Standard" or does it go into detail about your home? What about your neighborhood? I have seen several appraisals where all the boxes are checked and there are 1 or 2 sentences of descriptions and
that is it. Is this an appraiser that has spent the time needed to do the research to truly understand how much your home is worth?
While the intent of the Home Valuation Code of Conduct is good, I think it needs a lot of changes to protect the buying public. Instead it seems to be protecting the banks, automated valuation products and Appraisal Management Companies. Did I mention that
one of the lawsuits was directly related to an Appraisal Management Company pressuring it's appraisers... Oh and that at one time Attorney General Coumo was a major shareholder in an Appraisal Management Company. Seems to me the Attorney General should be
more concerned about protecting the homeowners and ensuring they get a quality appraisal report when they purchase or refinance a home.
The Real Estate Commission in the State of Washington is against the Home Valuation Code of Conduct. Wondering why Erin Toll who is the Director for the Real Estate Commission in the State of Colorado hasn't commented about these changes. As a woman who
has made a name for herself as a consumer advocate I would think she would see the problems with what has been suggested.
I will update my post as more information becomes available.