The Veteran’s Administration is all about helping veterans obtain home loans and offer a full range of services directed at aiding our veteran population; they protect those who have protected us. The VA provides assistance with home loans all across the country and the VA appraisal panel is a coveted job throughout the appraisal industry. Appraisers are vetted and only the best in any given market are given the title of “VA Appraiser.”
In order to protect American veterans, a home measurement standard would be a logical step forward. Anyone who truly understands the appraisal process (and the real estate market) should realize the impact size or square footage has on the market and appraised value of every home in this country. The real estate industry has become far too dependent on the square footage details listed in county tax records. The public records system clearly states that the square footage details within our public records system are designed and intended to be used by and for assessment purposes only. “These measurements and the subsequent valuations are for assessment purposes only and not created to be used for legal documents, for real estate purposes, or for fee appraisal purposes.” Tax assessors are the first ones to tell you not to rely on the square footage details, they are not intended to be precise. That is not their role and for 100 years that data came from MLS systems. We hear so much about the “Official Record” for square footage being provided by tax records and most real estate professionals understand this phrase is a myth.
If the VA sincerely wants to protect our veterans they must mandate that all their appraisers adhere to a standard of measurement. It can be the ANSI standard that Fannie Mae mandated in April of 2022 or a standard of their own choosing or creation. The key is that for appraised value to be accurate and consistent a standard of measurement must be part of the process. Fannie Mae gave the VA the perfect opening by stepping forward with the ANSI mandate earlier this year. The time for wait and see is over. It’s time for the VA, HUD, Freddie Mac and the National Association of Realtors to stand up to protect the American consumer and all mandate a measurement standard. Size equals money and a measurement standard is the only way to increase the “quality” of all real estate valuations, be they online valuation models, real estate CMAs, or appraisals, it’s time for the entire real estate industry to join the rest of the standardized world and get the appraisal industry and their sources of comparable data to have one language of real estate, which is the currency of real estate.
Mandating ANSI requires education and communication. We must help everyone involved understand the benefits of having a standard of measurement for homes, just like every component of a home is measured by a standard. It’s a win-win for all, but only if everyone participates (appraisers, agents, builders, architects, assessors, etc.. Right now we have a problem with highly inaccurate comparable data, based on a hodgepodge of measurement methods. Mandating ANSI only through Fannie Mae only highlights that problem, it doesn’t make it worse. The recent troubles with Zillow® only highlights the problem. Valuations based on inaccurate square footage data creates false values and hurts everyone involved. Improving the real estate information database will take educating the industry on the impact of size on all valuations, and that the quality of square footage information can change property values. For people’s single, largest, lifetime investments, they deserve to know the true and fair size of their home.