California Housing Market and Buying a House Valuation

The housing market in California is in constant fluctuation to market trends, rising a falling home prices and home inventory. Even the luxury real estate homebuyers can be caught in the tide of Los Angeles and Orange County property valuation issues. Property appraisals need to be in league with the current market valuations otherwise these can be transaction issues. The coordinators in the property sale need to be aware of the real market value in order to close the home sale in a reasonable time frame. The more real estate information you can find about a home and the sellers disclosure may help in the sale price.

In conducting a property search when buying a house the due diligence in getting the true market valuation of a house can be daunting for the first time homebuyer. Get all the real estate information you can and then talk to a local realtor or realty agent to drill down even more data.

The Home Valuation Code of Conduct was adopted by Congress in 2009 which was created jointly by members of Freddie Mac, the Federal Housing Finance Agency, and the New York State Attorney General in order to reduce any possibility of an over inflated property appraisal which was one of the many issues that brought down housing market.

When the HVCC was adopted it was not well received by most experienced real estate appraisers because the HVCC code eliminated working relationships between lenders and brokers that had been in place for many years. Once the HVCC was in effect it forced appraisers to work for appraisal management companies which paid only 50% of the fees that were paid to the appraisers before it was adopted.

The purpose behind the HVCC was to make sure that home appraisals were unbiased and performed by an independent source not having a relationship with a lender or broker in order to help make the appraisals more accurate.

At one point this created another problem because at times third-party appraisers would compile a value for a property that was significantly off the true markets value because the third-party appraiser was not familiar with that particular area. However, with the HVCC in place, lenders had to go along with the appraisal management companies appraisals which made it more difficult for first time buyers to get a home and for the current homeowners to refinance.

This is where our celebrity comes into the story. World renowned singer and dancer Justin Bieber, who has estimated net worth to be over $50 million, tried to buy a mansion for his birthday and ran into an appraisal nightmare.

Buying California Luxury Real Estate

The 18-year-old has been looking for his first home and seemed to have found the home of his dreams in Calabasas California. However, the house that he wanted appraised for $6 million less than the asking price. This kind of situation is bad news for any buyer including Justin Bieber because, as we now know, a home appraisal that does not come close to fair market value can severely slow down the transaction.

Despite the fact that the property received a low appraisal doesn't mean that Justin won't be able to get his dream home but, what it does mean is that both Justin and the seller have a lot of work to do to complete the sale...of course at a fair price.