We all know that the US property market is in a state right now (no pun intended) so news that an increasingly popular way of valuing properties could in fact be damaging real estate prices is generating much concern…
As everyone looks for ways to save some cash, American property owners are increasingly turning to Broker Price Opinions (BPOs) for a valuation on their property as they are far cheaper than traditional valuations carried out by registered property appraisers.
These BPO valuations, which are often done by estate agents with minimal training, cost as little as £35, as opposed to several hundred pounds when a trained appraiser values a property.
But now there are warnings that the agents who are carrying out these BPOs are valuing the properties very low in order to ensure a quick sale and get the market moving again.
Research from the Affiliated Appraisers has shown that BPOs frequently understate actual market values by thousands of pounds.
These low valuations could be artificially depressing US real estate prices. BPOs pull other property prices down because, under lending industry underwriting guidelines, appraisers must consider recent listing prices as well as sale prices.
As they are more often carried out on foreclosure properties owned by banks, they are having even more of an impact where prices are already low.
In order to clamp down on these potentially harmful valuations, appraisers and consumer groups are calling for regulations to be introduced to the valuation market.
The Appraisal Institute adds to the wave of anti BPO feeling, saying that not only do its members lose revenue when property owners or lenders order BPOs, but that it brings down standards.
On the other side of the story, some surprised homeowners in the US are discovering that their property valuation remains far higher than they thought it would.
As US homeowners receive their 2010 property valuation notice this week, valuation and sales prices are found to be miles apart and the value of their homes hasn’t dropped as much as they had assumed it would.
Some homeowners are suspicious, thinking that the values are being kept artificially high so that local Governments can rake in more tax.
However, assessors and industry experts say that property valuations traditionally lag far behind the housing market and county is limited in what sales data can be counted toward establishing values.
For more information on American properties and the market in general, please visit http://usa.themovechannel.com/
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Notes to editors:
TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.
For further information as well as images and interview possibilities, please contact:
Dan Johnson
Managing Director
http://usa.themovechannel.com/
0207 952 7650
