NAHB and GAO: Flaws in Appraisal Process Must Be Fixed

February 18, 2012

house on top of a calculatorAs the housing market recovers, the National Association of Home Builders and Government Accountability Office have discovered that faults in the appraisal process might be a barrier. If you have tried to purchase Chicago real estate you may have already noticed some of the challenges.

The NAHB believes these deficiencies to be impeding the recovery of the housing market by hurting home values, hampering a housing recovery and often killing sales of homes coming in below the contract sales price. Three out of four builders have lost signed sales contracts because of faulty appraisals, according to the NAHB. Flaws in the appraisal system have caused incorrect values of homes, whether or not the home market is in a strong or weak state.

Along the same lines, the Government Accountability Office recently reported that the Appraisal Subcommittee needs to improve its procedures for supervising the appraisal process.

The NAHB has championed correcting the flaws so through education and training for appraisals of new homes and more rigorous oversight so appraisal guidelines are enforced and errors can be corrected as they occur.

“The current system is not working,” said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. “We must resolve a flawed appraisal process that produces inaccurate assessment of home values, because this fosters price instability, puts more families in danger of default or foreclosure, and undermines the housing and economic recovery. It’s time that regulators, appraisers, lenders and all of the stakeholders in this debate come together and agree on major reforms in appraisal practices and oversight to ensure that homes are appraised at their fair market rate.”

For more information on the NAHB‘s efforts, visit the organization online.

Categories: Economy

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Stephanie is an Integrated Account Coordinator at Rountree Group Integrated Communications. She has public relations experience in public affairs, social media, blogging, healthcare, manufacturing, real estate, restauranting and retail.

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