The Appraiser's gift of ignorance - thanks to the HVCC!

So, one of my clients bought his new home today! That is always a good thing. However, he was presented a 7,500 dollar gift from FHA (indirectly). See, FHA is now requiring that your lender must order the appraisal on your new home from a national appraisal "house". This "house" will select and assign an appraiser to appraise your home. The changes state that rather than going to an appraiser directly, lenders must order a real estate appraisal through a third party, such as an appraisal management company. This is to try and eliminate the Loan Officers from influencing the appraisers valuation results. Well, this appraisal "house" assigned an appraiser from well out of this homes location. The appraiser was not familiar with the community or it's respective values. Therefore he under valued the home (in my opinion) substantially. Because of the new appraised value the Sellers had no other choice than to lower his sale price to match the appraisal results (either that or not sell the home). While working with FHA transactions you only get one chance on an appraisal. You cannot go get another appraisal to override the first (even if you feel it is erroneous) for six months. My client saved $7500 dollars off the sales price and still got his Obama Stimulus Tax Bucks to 'boot! For a more detailed summary of the new FHA Appraisal guidelines I have found a wonderful (and boring) article. CLICK HERE FOR MORE on the new Home Valuation Code of Conduct.