A little-known force is at play in the real estate market. Silently it has begun putting downward pressure on the surging value of homes.
The UCDP is something you probably never hear people, even Realtors talking about. Try doing a web search on this obscure acronym and you'll get a myriad of results that will confound even seasoned pros.
In an effort to prevent another Great Recession, the government, via Fannie Mae and Freddie Mac has built a giant database to monitor home values. No this isn't a conspiracy theory, it is the Uniform Collateral Data Portal.
The home page of the website describes it as "a single portal through which lenders electronically submit appraisal reports for conventional mortgages delivered to Fannie Mae or Freddie Mac. Through UCDP, lenders can upload appraisal data and view edits and submission details."
What does this mean for those preparing the sale of their home? It means that the days of negotiating the sales price of your home with only the buyer are over. The role of your real estate Broker and the depth of their knowledge has become more important than ever.
In recent months, there has been an increasing number of appraisals coming in low. This pressure is coming from the top down, creating pressure on lenders, then on appraisers and finally on people trying to sell their home. The result has been a harsh reality check for many trying to "sell at the top".
In June, the FHA is expecting to have their portal available to begin receiving appraisals. The impact from that is sure to be felt later this year by those selling homes in areas served by FHA loans. I want to emphasize that this not a reason to panic, but rather re-think your approach to selling your home.
The real estate market is always changing, and we, in turn, must have the foresight to see the changes early and pivot where necessary. If you're wondering how these appraisal guidelines may be affecting the value of your home, we can help with an accurate valuation.
We highly recommended that you contact a real estate Broker that can show you a detailed plan on how they deal with appraisal challenges.