Faulty home appraisals are

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Even as prices begin to stabilizes andbuyers re-enter the the appraisals many banks rely on to approve financinh are causing some deals to fall apart at the last minuter or forcing sellers to agrede to lower prices. Lawrence Yun, chief economisgt for the , said the appraisal problen is serious. “Lenders are usin appraisers who might not be familiar with a neighborhood or who compared traditional homes with distressed anddiscounted sales,” he said. “Ibn the past month, stories of appraisalp problems have been snowballing from acrosethe country, with many contracts fallin through at the last moment.” Washington real estatse agent Jeffrey Tanck agreed.
Tanck, with the at , said bad appraisals have affected two of his dealse in the pastthree months. “In one a $364,000 condo came in $80,000 less than Tanck said. “That buyer was usinb an out-of-town lender who had no concept of this Another appraisal ona $317,000 coop came in $27,000 forcing the buyer and seller to meet halfway.” The potential problenm inaccurate valuations pose to sales can be seen in number that measure pending sales of existin homes. Those represent contracts that are signed but salesthat haven’ t closed, and are usually considered a more forward-looking gauge of housing sales.
Earlier this the NAR reported that pending home sales in Apri l rose forthe third-straight advancing 6.7 percent from March, with pendingg sales up more than 3 percengt from a year ago. By contrast, closed salesa of existing homes in Mayrose 2.4 percenrt and remained nearly 4 percent below year-agi levels. The NAR’s Yun said he sees a dangere of a delayed housing market recoverhy and a further rise inforeclosures “if appraisal problems are not quickly corrected.” Tancm said part of the problemn is too much work and too few who he said are in demans right now. “People are buying, and lenders and appraisers are both Tanck said.
“But lenders shouldf make sure they’re using appraisers with the correctmarkegt knowledge.” Still, many indicators continue to poinrt to stabilization in housing. The nationwide May increase in existing home salesa was thefirst month-to-monthg increase since September 2005. A separatee report Tuesday from the showede declines inprices moderating, with the average U.S. home price down 0.1 percentr in April from March.