the most out of the appraisal experience and to help ensure success during
the process, even if you are unable to
order the appraisal yourself:
Understand that no estimate 1.
of value will be given to the appraiser. It may be a good idea to
advise your client that this will be
a “roll of the dice” as market values have declined in most areas
and that you cannot get the value
changed without ordering an appraisal review and submitting a formal appeal. Communicate this to
borrowers when the appraisal is ordered to prepare them for any later
frustrations.
« APPRAISING continued from page 20
Understand who 2. the appraisal is
for. It is not for you or for the borrower; rather, it is for the lender. Its
purpose is to assist the lender in
making its lending decision for the
property. If the value comes in too
low or if there is something that
should be added or removed from
the report, this will need to come
from the lender. Most management companies have processes
for formal appeals and value reconsiderations. This is something
about which you should speak
with the lender. Simply asking for
a reconsideration of value to make
a deal work will not make anyone
do anything.
Advise the borrower to be prepared 3.
to pay. This is perhaps the most important thing when ordering an appraisal. Most companies will not
accept a billed appraisal, and many
will not assign an appraiser until payment is secured. This is because they
will have to pay the appraiser if the
borrower cancels or doesn’t show up.
Most companies have multiple payment options, including credit cards,
telecheck and online-payment services, which cover most borrowers.
Prepare the borrower 4. for the appraiser’s call and inspection. Having the borrower available for the
call and prepared for the inspection
not only will speed up the process,
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but it also will assist the appraiser
in delivering the best-possible product. Let the borrower know someone will be calling to schedule the
appraisal and to have time available during the next few days.
Appraisals have to be done during the
day for visible exterior photos; most
appraisers will not do appraisals after 6 p.m. Also, advise borrowers to
have all relevant information about
the house available. Having a list of
recent improvements, a plat map, a
floor plan and old appraisals will assist the appraiser in the inspection
and ensure an accurate valuation.
Manage your expectations 5. and don’t
assume anything. Most AMCs are doing the best they can to get the appraisals done as quickly as possible.
Managing appraisers in several counties and coordinating thousands of
orders is as complicated as it sounds.
Working with the appraisal company
instead of against it will ensure a
smoother process. The more upfront
work you do with your borrower, the
smoother and faster the transaction
likely will be.
Communicate any potential 6.
property complexities upfront. If the
property is on 100 acres and is
7,000 square feet, this should be
communicated to the AMC. Two reasons: First, the appraisal fee must
be quoted. Second, the appraisal’s
complexity might be beyond the
training of the appraiser originally
assigned to complete the report.
Reassigning the report to another
appraiser and having the new appraiser restart the whole process
can delay the process significantly.
Being proactive and honest is the
best way of doing business. Helping
your client be prepared for an appraisal
process and working with the appraisal
company as much as possible will promote a smooth transaction and a win-win relationship. •
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Although brokers can no longer
order property appraisals or
communicate directly with
appraisers when it comes to loans
to be sold to Fannie Mae and
Freddie Mac (as of press time) —
and starting Jan. 1, for Federal
Housing Administration loans —
you do not have to be shut out of
the appraisal process completely.
You have the right • to request
professional service from the
appraisal company and the
appraiser.
You have the right • to address the
lender regarding the service and
timeliness of the appraisal.
You have the right • to get an accurate appraisal that reflects
the property’s market value and
overall market conditions.
You have the right • to receive a
copy of the appraisal report.
