New Decision by Fannie Mae & Freddie Mac


A recent decision made by Freddie Mac to allow property waiver inspections on some purchase loans. Meaning that an appraisal may not be required for the purpose of home loan purchase. For many this sounds like a great idea because it will help reduce the cost of purchasing a home and shorten the amount of time the loan takes. This all sounds good, but what are some possible consequences of purchasing a home without an appraisal?

  1. Unbiased Value- Appraisers are trained to be unbiased party to a home purchase. Everyone else involved in the sale of a home has a stake in how much the home will sell for. By removing the only unbiased party you risk the value of the home.

Appraisers are trained to measure the market and weigh the comparable sales to the subject property to determine the true market value of the home. By removing this step and using an automated system there is a chance the property could be subject to a biased or incorrect opinion and the value will be inaccurate.

  1. Inaccurate Gross Living Area- Appraisers measure the gross living area of the home using an accepted standard to help compare each home accurately and the same. Appraisers select comparables partly based on bracketing of the gross living area. Often times the gross living area in public records can be wrong and if that is the case without a accurate measurement of the property the property will be compared to properties is different square footage which will effect the value.
  2. Comparables- Part of an appraisers job is to determine the best possible comparable sales, which is said to be about 90% of an appraisers assignment. Beyond just selecting comparables, it is the appraisers job to be sure that the adjustments for each comparable are as accurate and supportable as possible which only proves the similarity between each property.

Appraisers have been working with this new system the Fannie Mae Collateral Underwriter (CU) for some time now. It reviews some of the appraisals that are submitted and suggests additional comparable sales to consider. The comparable sales that the CU has often provided are often very obviously not a comparable. The CU has provided comparables that are a year old, out of the neighborhood, foreclosures, in different school districts, etc. All of these factors would greatly affect the value that is given to the home.

  1. Bidding Wars- The inventory in San Diego County is down and there have been bidding wars on many of the properties selling. A tactic that real estate agents use is to list the property low to solicit multiple offers and overbids. If this continues and no one is double-checking to verify if the property is selling far above the market value than prices will sky rocket and everything will become unaffordable.
  2. Lawsuits agents Real Estate Agents- If a home is sold for much higher than it is worth due to the lack of an appraiser it could result in the buyers suing the agents. Although many believe that if the buyer is willing to pay a specific price for a property that that should set the market value. Unfortunately, this is not always the case which is why an unbiased appraisal is highly recommended and has the been standard for years

The possibility for problems when determining the value of a home to buy or sell goes up significantly without the appropriate evaluation of the property to determine the market value. The Fannie Mae decision may not be the best decision but only time will tell.


Please contact our office with any questions you may have or to schedule your appraisal appointment at 760-741-7699, or use our contact page on our website.

Brandlin Appraisals Inc. specialize in helping people who need appraisals for estate purposes, divorce, date of death, bankruptcy, FSBO’s and more throughout San Diego county. For more information please contact us at (760)741-7699, or visit our website at, or email us at

Mike Brandlin
San Diego, CA // Real Estate Appraiser
(760) 741-7699

San Diego Real Estate Appraisal Services For:
Divorce Appraisals / Marriage Dissolution
Bankruptcy Appraisals
Bail Bonds Appraisals
Estate / Date of Death / Retrospective Appraisals
Financial Planning & Trusts
PMI Removal Appraisals
Pre-Foreclosure & Short Sales
Tax Assessment Appeals
Pre-Listing, Pre-Purchase, FSBO’s
Probate Appraisals


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