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HVCC Current Appraisal Rules: The Law of Unintended Consequences for SF Home Sales

The Law of Unintended Consequence: When an action leads to results that were unanticipated or unintended; can be positive or negative

The current home appraisal rules (HVAC) have had a myriad of unintended consequences. The intent of the guidelines was laudable: to help make the home valuation process more objective. The idea being that shady appraisers, Realtors, mortgage brokers, buyers and sellers helped create the over-inflated housing mess. I have a couple of issues with this approach. 1. We’re not all shady. 2. As with many bureaucratic pursuits, the intended goals are “lost in translation” as the rules fail to take into account how things actually work in local markets & in practice.

The unintended consequence of the new appraisal rules has been kind of the opposite of what the rules were trying to avoid. Instead of plumping up home prices, they are pushing them down. (more…)

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