I want to thank everyone who responded to last week’s article about the new policy of Fannie Mae and Freddie Mac that will allow in many purchase transactions a waiver from obtaining an appraisal. I wanted to hear from you, both consumers and real estate agents, if you thought this was a good idea.
The results were interesting because the responses were almost evenly split for those in favor, and those against. Those that were in favor of skipping the appraisal all shared a common thought: If the property being purchased, such as a condo or tract home where there were identical or very similar comps, then opting out of an appraisal was not detrimental to the process. The real estate agent crowd felt that they could gather sufficient information from comps to be able to negotiate a final sales price in line with what an appraiser would ultimately come up with.
Those that responded thinking the appraisal waiver was a bad idea were more general in their reasons to always get an appraisal. The consumers felt that without an appraisal, they would never know if they paid too much. The agents that were in favor of appraisals felt it was their duty to confirm for their clients the agreed upon sales price was in line with the appraisal value.
In conclusion, if you are buying a home where there are lots of comps and sales of similar homes are very recent, then maybe an appraisal is just an extra cost and not really needed. However, in Hawaii, every single family home is different in some way. Be it remodeled, upgraded, or different view, these homes that on paper appear to be the same, could be zip codes apart in value.
The good news is that the choice for an appraisal is yours. Even if your lender says you qualify for an appraisal waiver, you are not required agree to it. Use your best judgement, along with the judgement of your real estate agent, to make the decision that’s best for you and your transaction.