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Napa Real Estate Q&A : Winter 2016

Q: I am in escrow to sell my house and my realtor is concerned about the buyer’s appraiser valuing the house at the contract price. Is there anything that I can do to insure a fair appraisal?

A: Your realtor is justified in his or her concern. Appraisers and lenders are currently being ultra conservative in their property valuations in reaction to the sub-prime debacle and the decline in property values. Plus, prices are now appreciating in many areas and this means that comps in a particular area might be low if they are more than a few weeks old. In addition, new federal regulations that seek to shield appraisers from undue influence by lenders and borrowers have resulted in more out-of-area appraisers being called in to appraise local properties. These factors have created problems on some appraisals.

There is good news however. In response to these problems the Federal Housing Finance Agency, Freddie Mac and Fannie Mae have issued guidelines to mortgage lenders encouraging the use of appraisers who have experience in the geographic area where the property is located. Further, they have made it clear that appraisers can consult with, and accept comparable sales data from, the realtors involved in the transaction. Based on these guidelines your agent should work in concert with the buyer’s agent to insure that the appraiser has local market knowledge and to provide the appraiser with relevant comparable sales data, and data on neighborhood appreciation rates, asking prices, days on market and frequency of multiple offer situations. So be proactive in the appraisal process rather than waiting in trepidation for the result.


Q: We are relocating to Napa from another state and wanted to know if we could utilize FHA financing to purchase a home in Napa even though we currently have a FHA loan and will be renting out that home once we make the move. Is this possible?

A: If a borrower owns a home with FHA financing that will not be sold, the borrower may not purchase another home utilizing FHA financing. The exceptions to the one FHA financed property are relocation and increase in family size, so based on your question, you would appear to be eligible for a second FHA loan. Contact Mortgage Solutions for more details regarding the exceptions.