Appraised values, in many cases, have become a rubber stamp for the real estate and mortgage industry.
Too big to fail also mean so big we can walk all over your rights and do as we please.
Years ago when I first became a member of the Real Estate industry, first as a licensed salesperson and later as a broker, the small independent offices outnumbered the big franchises. A real estate office was just a place where you could find a REALTOR to help you buy or sell a property. The lenders and the appraisers were separate and independent from one another and from the real estate office.
As the big national real estate companies became more prevalent and bought up more and more of the little independents they also became more powerful in the Florida Association and the National Association of REALTORS. Big changes started coming down the pike regarding rules, regulations and laws pertaining to those involved in real property sales and which, I believe, eliminated much of the safety net which the separation of lenders, appraisers and real estate sales had provided.
I was then and have continued to be concerned over the fact that the consumer protection, which the separation of sales, appraisal and lender had provided was being lost as the big offices began incorporating first lenders and then appraisers in their one stop shopping for a home.
When a contract hits these offices you now have not just one commission coming in to the office but in many cases three. You can bet everything that can be done will be done to ensure the completion of the deal.
The first time an appraiser called me and ask for the contract price on the house he was going to appraise, and for which I had the listing, I was totally appalled. I ask him why he would think he should have this information available when it was his job to determine the value. I refused to give out the information. Upon voicing my opposition to this situation I learned that it was fast becoming common practice for the appraiser to go out to do the appraisal armed with the contract price. Before long you could pretty much count on the appraisal coming in within just a few dollars of the contract price.
I believe selling, lending and appraising needs to be separate entities for the protection of the consumer. I also believe that this bundling of services and the accompanying control one office has over all aspects of the sale has helped to bring about the real estate bubble which is at the root of our financial problems.
Labels: Are You Protected when Realtors Also Provide Mortgages and Appraisals