The August issue of Money Magazine had a great article on getting a fair appraisal when you refinance your property that I would like to share with my readers. If you've been reading my blog, you've been seeing that the appraisal game is changing and the new rules don't guarantee accuracy, in fact, in my practice, I've seen more errors in appraisals than ever before.

Appraisers are now more likely to be under pressure or feel hurried in order to crank out reports, thus, the inaccuracies and problems. It's up to you to make sure that they have the full information on your home. Your detective work can pay off. A key factor in the valuation of your home is the comparable sales prices for other homes like yours in your area. Keep in mind that they must be at least within the last six months, or in some cases, even less. Ask a real estate agent to run a CMA (comparative market analysis) to identify recent comparable sales in your neighborhood. Try to get the scoop on the circumstances of these sales from your neighbors. A foreclosure, divorce, short sale or relocation sometime can be taken into consideration.

Also, make sure your home is in showing condition. Appraisers appreciate the appearance of your home and it's only going to help your cause. At least get rid of the clutter, dust a little, and clean up the yard. 

While the appraiser is there, point out the home's best features, as if they were a buyer. Don't hover over them every second that they are there, but definitely spend some time showing them around, especially pointing out any recent upgrades or improvements you may have done. Also if you have custom made items, such as custom woodwork or your property has wonderful landscaping or is in a great school district, point it out.

After the appraisal, ask your lender for a copy of the appraisal. You have the right to receive it. Check it for error in the key statistics, such a number of bedrooms and bath, square footage, and features. If you find a mistake, contact the appraiser directly and ask him/her to make the change. If he/she refuses, you do have the right to report him or her to the state's real estate appraisal board. Also let the bank or broker know there's an error but keep in mind with the new rules in place they can't talk to the appraiser directly.

Time is running out for buyers to take advantage of the first-time homebuyers tax credit.

The fed's $8,000 tax credit expires on November 30th and because mortgage approvals, inspections, and other steps of the process are taking about two months, buyers should expect to have a contract in place by the end of September in order to meet the deadline.

The new flurry of activity has really caused an uptick in the market which is historically low at the end of the summer.

As if we didn't know already, the Fed says lending standards are tight, and will remain tight throughout most of 2010 for real estate, consumer and business loans. This is not helping the recession as we know it.

The government has been trying without much success to get lenders to lend. Banks have been tightening their standards for various types of loans for more than two years after they let credit expand too much, especially for residential real estate. For residential mortgages, banks have tightened their standards for 11 straight quarters by increasing requirements for down payments, interest-rate spreads, or credit scores.

In a separate report released Monday, the Fed said the delinquency rate for all loans and leases rose to 6.49% in the second quarter from 5.58% in the first quarter. That's the highest delinquency rate since 1985, when the Fed began collecting the data.

The Fed surveyed the banks to find out when they thought their policies would get back in line with their long-term trend. For commercial and industrial loans to businesses, just 13% said conditions would return to normal by the middle of 2010, with another 36% saying it would be in late 2010.

For commercial real estate, just 2% said normal credit policies would return within a year, and 40% said policies would remain tighter than usual for the foreseeable future.

For prime mortgages, 9% said they expected policies to return to normal within a year, and 42% said policies would remain tighter than usual for the foreseeable future.

For nonprime borrowers, a majority of banks said policies would remain tighter than normal for the foreseeable future, and fewer than 10% said standards would normalize within the year.

For more on this, or to see the whole article, click here.

Hope everyone is having a great summer! July is my busiest month of the year, so I haven't had much time over the last couple of weeks to blog, however; the Sunday Chicago Tribune this past week could not have published their article, "Value Judgments" in a more timely manner.

Over the last month or two, I have had serious issues with deals and appraisals. One client had a buy and a sale going on, and NEITHER property appraised for the purchase price. I am finding in a great number of these cases that there are material errors in the appraisals which, once corrected, cause the property to easily appraise for the purchase price. In one instance, the comps that were used in the appraisal were just all wrong. In another case, the subject property's attributes were significantly misstated, causing an appraisal issue.

Let's face it, the appraisal game has changed because of what's happened in the market. Mortgage lenders are scrutinizing the appraisals more than ever, reviewing them carefully in the underwriting process. Appraisers are becoming more restricted in the comps that they can use, and the appraisals are becoming more difficult as a result. For example, it used to be an appraiser could go back six months or more to find a comp, now, they are restricted to comps no older than six months, sometimes even three.

I think one of the reasons that there were such material errors in a couple of appraisals that I mentioned earlier was because of the new policy that went into effect called the Home Valuation Code of Conduct. It is intended to keep appraisers at arm's length to ensure unbiased appraisals and often has an appraiser who is not local to the area conducting an appraisal, instead of that local appraiser chosen by the bank. These appraisers are not familiar with the neighborhood they are appraising in, or the neighborhood's market, and sometimes cannot properly appraise a property.