This just in from the Appraisal Institute:
"Four states – Illinois, Maryland, Missouri and Nevada – are considering legislation that would prohibit or restrict the use of “distressed sales,” such as foreclosures and short sales, as comparable sales as a part of a residential real estate appraisal.
Home builders and real estate sales agents are concerned that the prevalence of distressed sales, and their subsequent use as comparables, is resulting in the appraised value of residential properties not matching the contract sales price, or in the case of new construction, the cost to build." The issue is, can you legislate this in the trenches? Maybe just maybe. Read more . . .
The Appraisal Institute article says:
If these bills were enacted into law, appraisers would be put in the difficult position of having to choose which law to violate. Appraisers are required to adhere to comply with the Uniform Standards of Professional Appraisal Practice in federally related transactions. The standard mandates that appraisers “must analyze such comparables sales as are available.” Further, the standard cannot be voided by a state or local government.
Source: Builder On-Line
- To read the Illinois legislation, go to http://www.ilga.gov/legislation/97/HB/09700HB0092.htm .
- To view the Missouri proposal, go to http://www.house.mo.gov/billtracking/bills111/biltxt/intro/HB0292I.htm .
- To see the Maryland legislation, go to http://mlis.state.md.us/2011rs/bills/hb/hb1309f.pdf .
- And to see the Nevada proposal, go to http://www.leg.state.nv.us/Session/76th2011/BDR/BDR76_54-0532.pdf .