Government Affairs Hvcc Research Results

An analysis by the National Association of REALTORS® (NAR) indicates that the implementation of the Home Valuation Code of Conduct (HVCC) appears to be having adverse impacts on the housing markets. Recently, NAR Research sent a survey on this topic to a random sample of approximately 40,000 NAR members which generated 3,600 responses. An analysis of REALTOR® responses follows. Approximately 76% of REALTORS® representing buyers or sellers indicated that the time to obtain a completed appraisal increased after May 1. Among those indicating an increased appraisal time noted additional time to get to closing with 69% saying it increased the time to close by more than a week.

ADDITIONAL TIME TO CLOSING 50% 40%

46%

30%

27%

20%

23%

10% 3%

0%

Less than 3 days

Increase of 3 - 7 days Increase of 8 - 14 days More than 2 weeks

Lost sales due to a delayed appraisal were reported by 37% of REALTORS® attempting to complete home sales, with 16% reporting one lost sale and 20% reporting more than one lost sale.

CURRENT ASSIGNMENTS FROM AMCs

The number of Appraiser members reporting they obtain over 50% of assignments from Appraisal Management Companies (AMCs) increased from 13% to 40% after May 1st.

40%

30%

38%

20% 10%

10%

12%

16 - 25%

26 - 50%

0% 0 -15%

Both REALTORS® and NAR Appraiser members noted a decrease when it comes to the quality of appraisals. NAR appraiser members also noted a reduction in quality due to reduced timing. QUALITY OF APPRAISAL 60%

57% 49%

50%

40% 30%

REALTORS®

37%

30% Appraiser Members

20% 10%

13% 3%

11%

2%

0% Severe Decrease Moderate/Slight Decrease But Not No Change/Impact Increase Quality Decrease Severe

UNFAMILIAR GEOGRAPHIC AREA - APPRAISER RESPONSES

8%

Percentage of Assignments

4% 4%

0 - 10 11 -25 26 -50

50 and up

85%

NAR Appraiser members reported a significant number of assignments in unfamiliar geographic areas. Similarly, 71% of REALTORS® noted an increase in the use of out of area appraisers. Among individuals responding affirmatively, increase in use of out of area appraisers was: --53% noted an increase of up to 25% --27% noted an increase of 26 - 50% --20% noted an increase of over 50%

APPRAISER FEES 40% 35%

Approximately half of NAR Appraiser members reported a reduction in fees received by them.

37%

30%

34%

25% 20% 15% 16%

10%

13%

5% 0%

Reduced by 50% or more

Reduced by 49% or less

Unchanged

Increased

COSTS OF APPRAISALS TO CONSUMERS

Percentage of Cost Increases

24%

75%

Generally under $100

More than 70% of NAR Appraiser members reported that consumers were paying higher fees.

Over $100

For more information on HVCC, please visit www.realtor.org/HVCC