A popular webinar offered by NAHB's Housing Finance and Business Management & Information Technology committees and sponsored by Builder Partnerships on August 4 provided some sound advice for builders who have had trouble obtaining accurate appraisals for new homes. At the very top of the list is the need to improve the lines of communication between builders and appraisers, said panelists. While such communication channels have been impaired for some time now due to difficulties in interpreting the Home Valuation Code of Conduct that was put in place by Fannie Mae and Freddie Mac, newly issued policies from both of these agencies attempt to correct that problem. In addition to making it clear that builders may and should provide information to appraisers, the guidance also clarified the appropriate use of distressed home sales as comparables, stated that lenders may not unilaterally change appraisal reports, and reiterated that appraisers must have appropriate knowledge and experience to undertake specific assignments.

Builders participating in the webinar were told that they should meet with the appraiser on the site where their home has been or will be built, and provide direct support with whatever relevant information they can. Panelist Martin Mitchell of home builder Mitchell & Best in Rockville, Md., explained, "It can't be said enough: communicate, communicate, communicate. Go out and find the comps yourself; look at the multiple listing service and pull what you can from that to assist in comps." Panelist Allen Gardiner of Jackson Claborn Inc., an appraisal and real estate consulting firm in the Dallas-Ft. Worth area, said that important information for builders to provide includes traffic, absorption rates and sales that the builder is making so that the appraiser can judge market demand. "One of the biggest mistakes builders make is they hide data," he noted. "Provide all the relevant data, present a low-priced sale if there is one out there and let them know why the sale is low, and show how it is related to higher-priced sales." For more complete coverage of NAHB's appraisals webinar, see this story in Nation's Building News. You can also access a free recording of the entire "Builders' Guide to Appraisals" program by clicking here. Contact: Steve Linville, 800-368-5242, x8597.