What a Real Estate Appraiser Says

Nancy Dierx, of Real Estate Appraisal Professionals, spoke at the Realtors' tour breakfast this morning. She talked about a new code of conduct for appraisers that will be required in the beginning of 2009, but is already being used in the field. Unethical appraisers were implicated in much of the subprime scandal, and the industry is trying to clean up its image. One of the changes that will change our market is that appraisers can only use comparable sales that are three months old or less. Six month old comparables were previously allowed.
One of the many questions involved short sales, and their impact on surrounding property values. I had heard of a case recently where the lender forgave much of the loan balance on a small condo in Sunnyvale. It sold for $280,000, but recent sales of other units were in the mid $300's. Nancy said that unless there was a pattern of these lower sales, the appraised valuation would not be affected.