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For the past couple months I have been fighting with this wonderful new HVCC law and how it pertains to today’s real estate transaction. This was a perfectly good transaction until the appraiser got involved and that is when a smooth transaction went from smooth to will this ever close?

Well today I’m happy to say it closed and funded! This was suppose to close on May 13^th and had this new HVCC law not taken affect on May 1^st, it would have! On May 1^st we had put in an offer on a property. The buyer had already met all the underwriters conditions on another home, but the inspection and what the seller was willing to do weren’t going to fly. So my buyer decided to walk and found this home the same day. (May 13^th was an easy date to close by according to the mortgage broker.)

So on May 1^st we ordered the appraisal and low and behold May 13 comes and goes and we have no appraisal and we can’t contact the appraiser to find out what the hold up is, because that would be against the new law. (NO CONTACT!)

So on May 21, 2009, we get our appraisal back, but its $27,000 less than what my client offered and $35,000 less than the original asking price. The only problem is we can’t talk to the appraiser to find out what he used for comps, because all our comps show this priced dead on! But, once again, we aren’t allowed to question the appraiser. How can a home appraise for $15,000 less than anything else on the market including a condemned home and $35,000 less than the last three sales on the same street? (It has the same square footage, same yard size, same builder, same year…)

But, the sellers were desperate to sell, and lucky for my clients, they lowered the price of the home $18,000, but that still meant the sales price was going to be $9,000 above appraised value and the sellers were no longer going to be paying the buyer’s closing costs. Now, my buyers needed to come up with some cash and sign a letter to the underwriter stating they understand that they are paying more for this home than it appraises for. (Which they did.)

So, now here we are last Thursday and you would think docs would go out that day. But, wait, the appraiser hasn’t signed the document stating the house is now being sold for a lesser amount than was originally offered. Guess what, he didn’t even respond to the request from the underwriter for 8 days. Then when he did finally respond, it was, “No, I’m not going to sign that unless you pay me more money!” WHAT? That is blackmail!

Finally, on Friday, the underwriter went to senior management and got the senior underwriter to realize that the appraiser was being a “_____” and that they should just go around him and approve it, which they did very successfully and now we are finally closed and ready to move on, or are we?

As of today, there are at least two ethics complaints being filed by the buyer and seller against this appraiser since it cost both of them thousands of dollars that they could have used to make this sale work. But, they also plan to recover that loss by suing the appraiser individually. I honestly hope they win, because this guy was doing this just to do it and he had no reason that we could figure out. But, if we can get him out of the business and also get the HVCC law overturned, it will do a lot more for real estate than it will being in place.

Todd Clark - Broker / Sales Coach
Palazzo Realty Group
Phone: (503)524-9494
Fax: (503)622-8739

©2009 Todd Clark - When HVCC rears its ugly head, everyone should take notice.