Fannie Mae has established new guidelines for filling out an appraisal report.
The following requirements and clarifications are included in the guidelines:
- Supervisory appraisers can no longer just sign off on an appraisal – they must inspect the property themselves.
- The sales contract and all addenda must be given to the appraiser. If the contract is updated, the updated contract must be given to the appraiser.
- If the appraiser uses comparable sales from outside the neighborhood where the property is located, they must explain why they are doing it.
Fannie also clarified some appraisal issues:
- Repair escrows can be used for minor problems with the property (worn carpet, minor plumbing leaks, holes in screens, cracked window glass, etc.).
- The appraiser must comment on each time the property has been listed for sale in the previous 12 months.
- The appraisal must be for the entire property, not just for a part of it (all acreage must be counted).
- If an adjustment for the effective age of the property is used in the appraisal, it must be explained.
- When anyone with a financial interest in the transaction (real estate agents, buyer, seller, mortgage broker, etc.) provides the appraiser with comps, the appraiser must verify them.
- Neighborhood boundaries cannot be expanded to encompass comps.
- Time adjustments must reflect the difference in market conditions between the date of sale of the comp and the date of the appraisal.
These guidelines go into affect January 1, 2009.
What do you all think? Are these guidelines helpful to the appraisal profession, or do they just make it more difficult to be an appraiser?