A WASTE OF MONEY & ANDREW CUOMO

Sometimes,throwing your money out the window may be a good idea. As a parent, that almost kills me to say. As a real estate and mortgage broker, it almost kills me to tell you why. If, for any reason, you've had an appraisal done on your home in the last 11 months, you may have noticed a few things:

The appraisal costs a lot moreThe guy/woman doing the appraisal has no idea that Foothill, Grand, Garey, Magnolia or Sierra are the major streets in your town

The same guy/woman makes reference to the fact they have been licensed since Thursday

When you finally get your appraisal, the value is low. Upon further inspection, you realize the appraiser has compared your home to a) The year old repo up the street., b) The crack house 5 miles away., c) a home that looks nothing like yours.

What could have caused all of this mess? In the name of "financial reform" it's part of what the government has done to protect you, the consumer. Feeling better yet? Below is an excerpt from an article in today's Los Angeles Times that will go into greater detail:

By Kenneth R. Harney
October 31, 2010
Reporting from Washington —

...In all likelihood, the money you pay (for an appraisal) isn't just going to the person who does the appraisal. It gets split up, and sometimes your lender is getting a sizable chunk of the action. An estimated two-thirds of home appraisals are produced by appraisal management companies, some of them owned in whole or part by big banks.
Many of those companies have slashed appraiser fees from traditional norms — $400 or $500 to the appraiser — and now hire only appraisers who agree to work for $175 to $200. They also require fast turnarounds — complete appraisals delivered within 24 to 36 hours of the assignment.
Since experienced appraisers generally refuse to work for such low compensation and rushed delivery demands, many appraisals are assigned to newcomers to the field. In some cases, critics charge, the jobs go to inexperienced appraisers who are willing to travel far beyond their home markets to get the assignment.
Gregoire and Turner say they routinely hear complaints from realty agents about low-ball valuations turned in by out-of-area appraisers who have minimal knowledge about local market trends and don't distinguish distressed sales from ordinary sales. Sometimes the bad appraisals undervalue houses by tens of thousands of dollars and kill sales or refinancing, leaving buyers, sellers and their realty agents sputtering.
Brian Coester, chief executive of Coester Appraisal Group, an independent management company with a network of 3,000 appraisers in 50 states, agrees that low fees to appraisers "produce low-quality appraisals."
"At $180 to $200," he said, "you're not going to get good work." Pay the appraiser more — say $250 to $350 — "and now you're going to get a quality product." His firm averages $275 to $300, Coester said in an interview, but is constrained by the demands of mortgage lenders, some of whom will pay only $300 for the appraisal but later charge consumers $450 at closing.
kenharney@earthlink.net.

So as election nears, keep in mind those that may have allowed this entire mess to propagate, and those that have "helped" you out since. If you happen to live in New York, think Andrew Cuomo.