The newly revised Home Valuation Code of Conduct goes into effect on May 1st, but it remains to be seen whether the new provisions will resolve troubles that became apparent last year. The revisions require lenders to obtain appraisals through a third party, so-called Appraisal Management Companies, rather than order the appraisals directly through their own sourcing. The goal here is to create a firewall between the lenders making loans for properties and the appraisers, who are valuing the properties, thus eliminating any kind of pressure to influence the outcome of the appraisal.

I completely agree that there needs to be a way to prevent lenders from putting pressure on appraisers to produce favorable property valuations and am in favor of a firewall between the lending industry and appraisals. But the provision to require a third party to order appraisals is problematic.

Appraisal Management Companies (AMC’s) add another layer of fees to the process, which will either be passed on to buyers or will force appraisers to operate as such reduced margins that it will become too difficult to attract and retain appraisal professionals of high quality and experience. Appraisals these days are more complicated than they were  a couple years ago, when the market was constantly rising. A thorough, professional appraisal is a complex process, and it would be an unfortunate development if the appraisal industry was forced to raise fees in order to stay in the business.

Further, there are bound to be loopholes in the new provisions that still allow lenders to work directly with appraisers, defeating the purpose of the revisions to the code.

I’m curious to know what lenders and mortgage brokers think about the changes in the code, and how this will pan out for all professionals involved in the industry. Please feel free to share in the comments section below.

If your property value goes down, doesn’t that mean your tax bill should too? The answer is yes – but you need to file an appeal to find out. The deadline to file an appeal is March 2 in New York City and April 1 in New Jersey.

This year has been unique because property values have been in sharp decline. Your tax bill, as you know, is based on your property tax assessment, but tax assessments do not keep pace with changing markets, especially when the market changes as rapidly as it has in the past few months. Current assessments are most likely based on property valuations made a long time ago, when prices were higher. Chances are, you have not heard from your municipality about this. If so, check immediately to see how your home has been assessed and what your taxes will be for 2009. If your taxes seem out of line, you can file an appeal.

The appeal will require you to enter what you believe to be the true value of your home. While you can do research and make your best guess at this, the best way to determine this value is to have a professional appraisal conducted. The value you enter on your appeal will be used as the basis for your appeal, so it’s best to have a professional appraisal that will stand up to professional review by your municipality.

Please contact me if you are interested in learning more or would like to schedule an appraisal. For more information about the appraisal process in New York City and New Jersey, or for information on other municipalities you can visit our website. or contact us by phone at 1-866-467-5100.

In partial interest ownership of real property, determining minority discounts is an important matter for the purposes of estate planning, real estate taxes, the re-sale process or any other transfer of the property in question. Minority discounts vary greatly depending on numerous factors, and must stand up under great scrutiny, making the process all the more crucial. This article prepared by by myself together with Gerald H. Morganstern exclusively for the NY Law Journal provides an overview of minority discounts and describes the commonly applied technique used in determining minority discounts. Click here to see the full  article.