As a nationwide appraisal management company, we have the benefit of working with multiple facets within the housing industry. We are hearing more and more that appraised values are coming in lower than what the bank and borrower estimated, resulting in a shattered would-be loan. Often times the finger will point to the appraiser as the one to blame for the low valuation, but let’s be honest…residential appraisers don’t create the market, they simply report it. In addition to this, the National Association of Realtors recently commented that delays in appraisal turn times have caused a hiccup in the housing market due to delayed closings. Is this really the appraisers turn time that is lengthy, or is it the bank’s underwriting requirements and multiple revision requests to the appraisal as a result? It’s hard to make a general determination, since turn times vary greatly nationwide. We see some rural areas have appraisal turn times of one month, while other urban areas will have the appraisal complete in one day. Either way, with these current issues prevalent in appraising nationwide, what do we do? Do we sit back and let the chips fall where they may…or do we take action? At Nationwide Appraisal Network, we believe in taking action!
What can we do as an AMC to help manage these expectations and create a smoothe process?
1. Encouraging borrowers to work with the appraiser when scheduling their inspection appointment is a great start. Due to the decreasing number of residential appraisers nationwide, borrower flexibility would enable the appraiser to improve their time management. Erik Richard, CEO of Sherman Oaks, Calif.-based Landmark Reverse points out with improved time management “the appraiser can stack their inspections and comp photo trips efficiently, they can get the work done faster.”
2. Advise our clients on ways to help estimate a value range other than using what the borrower “thinks” their house is worth.
a) Check the local tax records and assessment of the property.
b) Do not rely on websites like Zillow or Trulia to obtain an accurate value, as they only give you a general idea and are not as precise as an appraisal.
c) Use AVMs with caution. Again, these provide a general range, but do not take many factors into account the way an appraisal does and do not guarantee an accurate value.
d) Stick to the conservative side and let the borrower know up front the value may be lower than what they think or have estimated it to be.
3. Hold our panel of appraisers accountable for turn times and deadlines they agree to.
I am confident that as the best appraisal management company, we will exceed these expectations.