I have previously presented a number of problems with the idea of inflating the selling price of your home; one, in particular, dealing with the Appraisal. This article presents a different, even scarier angle on that problem, that may end up with consequences on a national legislation level.
I’m happy to let you know, however, that the Century 21 Arizona Foothills partner, Hamilton Mortgage has taken steps to keep our customers from experiencing these kinds of problems. From a memo I received April 5, 2005:
“Currently, Hamilton Mortgage, nor [sic] any other investor (this is industry-wide period) will accept an appraisal that uses time as a means for value adjustment. Hamilton Mortgage and investors (industry-wide) will only take appraisals that use comps for property value.”
Basically, this memo was to let the agents know up front that the appraisals Hamilton Mortgage will be ordering for their loans will be conducted by the book and not padded with the knowledge that the market is appreciating at such a rate that the property in question may soon be worth more. This may make my life, as an agent, a little more difficult when I have a home that has sold for more that it appraises for, but in the long run, it will make the market a much healthier place.