Rules Change? Possible loss of business for Appraisers.
Are we setting the stage for future misery, again?
U.S. bank regulators may increase the commercial loan threshold for requiring appraisals from $250,000 to $400,000, Bloomberg reported. The change could make it easier for small-business owners to secure financing and also ease costs since appraisal fees are typically well over $2,000.
The Independent Community Bankers of America called for an even higher threshold of $500,000 last year, saying that a change was needed “to reflect the rising costs of real estate particularly in many urban markets.” The minimum for residential real estate would remain at $250,000.
At the same time, the change could put a lot of appraisers out of work. Karen Mann, an appraiser who works in California, said appraisals are the best way to measure a property’s worth.
“There are a lot of things you don’t know by not having somebody go out and inspect the property,” she said. [Bloomberg] — Kathryn Brenzel Real Estate Appraisals | Small Business Loans Real Estate
While we support efforts to make it easier for small businesses to get loans, the valuations of small commercial properties is far more variable than the typical single family home.
What is that high effeciency furnace worth on resale? How about insulation or other features in a high efficiency home? A new program seeks to make the value of such features more evident to prospective buyers.
The program from RESNET and the Appraisal Institute would include HERS scores on appraisal forms in some states to make energy efficiency more transparent to buyers. The move also could help convince skeptical builders that there’s a return on constructing high-performance buildings, says Green Building Advisor’s Scott Gibson. Builders of high-performance houses often find that traditional appraisals fail to give enough credit for energy-saving features.
“One of the largest barriers to the building and selling of high energy performance homes is that the value of energy upgrades is too often not reflected in the real estate appraisal of a home,” RESNET Executive Director Steve Baden told the Insulation Institute. “Many of the features that make a home energy-efficient are hidden behind drywall and aren’t obvious to home buyers. Our goal is to make information, such as the HERS score of a home, visible in the appraisal so that consumers have more facts available to make their decisions.” Via builderonline.com
When you need a real estate appraisal done in Minnesota, whether commercial, industrial or residential, we invite you to contact us for a free initial consultation. real