REALTORS YOU HAVE MORE CONTROL OVER APPRAISALS THAN YOU THINK! READ ON....
Appraisers.... start telling Realtors what Lenders YOU have good experiences with...It will help to weed out the BAD Lenders if Realtors are more selective in who they chose to work
Here are steps REALTORS can take now to
have an impact on the Appraisal Process.
The LENDER you choose can and DOES have an impact, now more than ever on how the Appraisal will go. You have significant Power over what Lender the Buyer chooses and these are the 4 questions you
need to ask every lender before you refer business their way.
1.Will the Lender use an AMC (Appraisal Management Company) if so...Buyer Beware! They are notorious for underpaying their Appraisers,requesting unreasonable turn times for Reports,
yet the entire process is slowed down from Appraisal Request to final delivery to their Lender Client when an AMC is involved.
** I believe that You get what you pay for and if Appraisers are paid below Reasonable & Customary Rates, their report will likely not be top notch **
2.Does the Lender have In-House Appraisal Ordering and/or In-House Underwriting...If not Buyer Beware. Precious time is saved by the in house process but
more importantly, in most cases, these Lenders do not continually ask for dozens of revisions to the Appraisal Report, resulting in further delays and resulting in Appraisers being Conservative just to Fly UNDER the Review Radar. Not what
3. Does the Lender use as part of their Review process, Fannie Mae's CU (Collateral Underwriter). If so ask them what weight they will place
on CU. If alot...this is a Red Flag. Why? Because CU will force yet more revision requests and explanations from the Appraiser, including review of and inclusions of yet more comparable sales (increasing Appraisal Fees to the Buyer), further
delaying the process and further forcing Appraisers to remain CONSERVATIVE on their appraised values to fly under CU radar. FANNIE MAE has already put Appraisers on notice that if they find things in their report that are not consistent with other Appraisers
in the area or not consistent with their own past reports, they will be put on a Warning List and Finally if it continues a DO NOT USE LIST. That means the Appraiser is out of work essentially.
Appraisers are not at all happy and are running scared of Fannie Mae CU.Some fears are warranted while others are not,but the reality is, it is here to stay. They provide Lenders with CU review information but they are
NOT providing Appraisers with this Review process to run their appraisals through before delivery to the client. This process would at least let the Appraiser see if there are any issues with report upfront and they can EXPLAIN why they did what they did at
that point, instead of after it is delivered to the Client.
Many Appraisers also question being compared against the masses of other Appraisers. They could be the only one that gets it right, but if the masses say one thing and the one who got it right
says something else, they will be held to the mediocre standard of the masses. Many issues come to play with CU and most will be unintended consequences.
4. Does the lender have a pool of Appraisers that are familiar with the areas they serve.This is very important as you well know.Some Realtors are placing in their Sales Contract
that the Appraiser must be knowledgeable of the area or the special property...Such as Lakefront or Acreage or Golf Course homes and if not they want another Appraiser Assigned to the
Case. Fannie Mae Requires of Lenders to obtain Appraisers who are knowledgeable of the area or they MUST acquire that knowledge.
** What I am NOT suggesting or inferring in any way is that if you pick the "Right" Lender the Appraised values will always support the Sales price...not at all! We do not want
to go back to that unhappy place where Appraisers were pressured every step of the way to hit a number and we all know what happened in the market just a few short years ago....Let us not have short term memories on that time period.
What I AM suggesting is that you use a Lender who has a good pool of EXPERIENCED Appraisers and a Lender who Allows the Appraisers to use their years of education and ongoing experience
to provide them with the True Market value for the Subject property and NOT second guess the Appraiser's knowledge every step of the way. All this does is undermine the Appraiser and then the Appraiser decides they are going to remain Conservative and deals
will likely fall apart. Not a good thing!