Comments on: Appraisals – The Next BIG Hurdle In Buying & Selling Real Estate!

By: 2009 Real Estate Update: East Bay Real Estate’s Biggest Hurdle – Appraisals! » East Bay Real Estate

Mon, 03 Aug 2009 02:28:49 +0000

[...] April Jim Walberg provided a first hand experience regarding what has become the biggest hurdle for Buyers and Sellers [...]

By: Jim Walberg

Jim Walberg — Wed, 27 May 2009 15:12:10 +0000

Hello Kathleen, thanks for checking in. My observation is that the appraiser industry as a whole, is in turmoil because of how this new law is being acted out within our industry. And, I have had discussions with many appraisers who are rethinking their career because of having their compensation changed so dramatically with the third part scheduling companies take a significant piece of the fees. It will be very interesting to watch this play out for all of us.

By: Jim Walberg

Jim Walberg — Wed, 27 May 2009 15:09:28 +0000

Hi Fabi…thank you for your insights. I realize that in any industry change is a constant. And, I realize that there are different levels of professionals in each industry. This particular lender would not even talk about a second opinion. It may be that there is an extreme reaction as this law came into effect, and things will settle down as the lenders and appraisers figure out how to manage this new law.

By: Kathleen

Kathleen — Wed, 27 May 2009 14:10:13 +0000

Hi Jim,
Yes you will see more and more of this as time goes on. HVCC has made it difficult for us Professionals in this buisness to do our jobs.
Remember this only applies to conventional lending not government loans.
I have appraisers that are getting chosen that like you said that have no experience with the area and no experience in the business. I’m also being told by appraisers that have been in the business for many a year they are being asked for things they have never been asked for thus delaying the process and adding additional time before it is completed. It’s been taking 2 to 2.5 weeks for an appraiser to complete one because of all the additional information as well as the 3rd is not requesting the appraisal in a timely manner.
They are experiencing problems working with the 3rd party companies with having to resubmit appraisals with the changes they are requiring and getting paid 1/2 of what they use to get. These 3rd party companies are charging our clients $400 for an appraisal which is about average however the appraiser who is doing all the work is only get about $240 of that and the level of service is lower.
It is the next hurdle and the growing pains will continue…

By: Fabi Banifatemi

Fabi Banifatemi — Wed, 27 May 2009 02:50:19 +0000

Jim,
As you might know I’m also a certified appraiser and have worked for almost any major lender in the country for past few years.
I stopped working few months ago to concentrate on my real estate business. I’ve been working part time during past year or so any way.
I don’t understand the complaints regarding not being able to contact the appraiser. I’ve never considered any comps that I received from real estate agents, I politely accepted them but never considered them.
We look at the comps within different eyes since each lender has certain requirement that creates limitation for appraisers. For example comp being maximum 3 month old and lender would not accept time adjustment on up to six month old comps, or not accepting comps over 15% in square footage, etc.

Almost any lender that I know of has a review process and you can make a complaint with providing more accurate data. It is part of appraiser’s job to explain each item on your request as why it is or it is not a good comp. At the end appraiser change the value based on provided comps or stay with derived value. If a lender is not following this process then you should find a higher authority within the organization to have your voice heard.

All lenders are requiring a detail explanation if an appraiser uses any of special sales like probate, foreclosure, relocation,…..as why it has been used. Also almost all lenders today require at least 3 closed sale and 2 pendings (1 pending 1 active or 2 active sales)

I’m really sorry that you have to go through this frustration of dealing with a rookie or out of area appraiser but this industry goes through more confusion than clarity as years passes by. At some point, I was thinking of becoming active in Sacramento and push for some changes in California but who has time.

Please let me know if I can provide more insight in to the process for you.
Fabi

By: Michael Tacconi

Michael Tacconi — Tue, 26 May 2009 18:29:36 +0000

There are HUGE hurdles when it comes to appraisal. This is an ever-changing marketplace and we need to shift with market.

Thanks for the information.

By: Rodil San Mateo

Rodil San Mateo — Tue, 19 May 2009 20:11:51 +0000

I’ve seen mortgage officers around the country have similar problems to what you describe. Appraisal Management Companies (AMC) charging higher fees, sending appraisers from 100 miles away with little market knowledge, using mismatched comps or ignoring legitimate property comps, taking weeks to complete the appraisal report. Realtors can still communicate with the appraiser but the mortgage officer and home buyer can’t.

Purchase contracts will need to take this new situation into account, especially in regards to the length of the financing contingency. The days of mortgage officers getting a “rush” on the appraisal are pretty much over. I hope NAMB and the other groups involved in reforming the HVCC are successful. The situation now just hurts everyone (buyers, sellers, Realtors, mortgage officers, appraisers, etc) in the process.