Appraisal Question

Anonymous · ‎10-23-2009

My LO said the appraisal was supposed to happen on Oct. 14th and here it is Oct. 23 and still no appraisal. The LO claims she has to go through an "intermediary" and cannot contact the appraiser directly. Is this normal? And who is at fault for not getting the appraisal done in a timely fashion?

Lastly, is it usually the case that the appraisal has some issues that need to be addressed or are they usually fairly smooth (I know each situation is different, but if some folks could simply let me know how their appraisal went I would appreciate it).

Once the appraisal is done, its off to the USDA for approval. God this is nerve racking.

Jazzzy · ‎10-23-2009

Appraisals are now ordinarily ordered through appraisal management companies. That is an attempt to eliminate the pressure that was often put on appraisers by loan officers in order to close a deal. That is the reason for the "intermediary" and is why the loan officer cannot contact the appraiser directly. Yes, it's normal.

The appraiser may or may not have been to the property yet. After being on site, the appraisal has to be written up. So, if the appraiser was at the property on Oct. 14th, that does not mean you will get the appraisal on Oct. 14th. There may be no "fault" for the appraisal not being done "on time." Did the appraiser him/herself commit to Oct. 14th? Or...did the loan officer or appraisal management company make that statement?

The appraisal may or may not involve issues that need to be addressed. Some homes sail through appraisal. Other appraisals come back with a list of repairs that need to be made or further inspections that need to be done (roof, septic tank, well, etc.). If the property is in good shape and fairly priced, there should not be a problem.

BTW, my husband is a real estate appraiser...so I live this from the other side of the coin.

Desert-Rat · ‎10-23-2009

@Anonymous wrote:
My LO said the appraisal was supposed to happen on Oct. 14th and here it is Oct. 23 and still no appraisal. The LO claims she has to go through an "intermediary" and cannot contact the appraiser directly. Is this normal? And who is at fault for not getting the appraisal done in a timely fashion?

Lastly, is it usually the case that the appraisal has some issues that need to be addressed or are they usually fairly smooth (I know each situation is different, but if some folks could simply let me know how their appraisal went I would appreciate it). (Mine went really well, but I was doing a refi. I changed lenders tho so I had to pay a second one. see below.)

Once the appraisal is done, its off to the USDA for approval. God this is nerve racking. (you got that right! Hang it there!)

Most likely, it's not the Appraiser's fault. It's the fault of the AMC's not being able to find an appraiser that will work cheap enough to suit them.

Is this normal? Yes. It's the new normal, since May 1, 2009. This is due to a poorly thought out regulation (Home Valuation Code of Conduct) which was supposed to help borrowers but has severely hindered many.The loan officer cannot contact or have any contact with the appraiser.

Appraisals are ordered through an "Appraisal Management Company", which are for the most part owned by the banks. They charge more and pay the appraisers peanuts. My first appraisal in March cost 350.00, directly to the appraiser. The second, through the AMC October 10th, cost me 575.00. (I asked the appraiser what he gets paid? He got 250.00.)

Google "HVCC complaints". You'll find a lot of them. One of the biggest is the fact that YOUR appraisal, that YOU paid for is not transferable to another lender, it requires a new appraisal if your financing falls through for any reason, And......at YOUR expense.) It makes rate shopping very expensive.

There may be light at the end of the tunnel soon. There is legislation being pushed through to eliminate this ridiculous "consumer protection" farce. I just hope it happens sooner rather than later for the sake of folks trying to purchase homes.

Please post again to tell us how this works out for you, and Good Luck!

D-R

Anonymous · ‎10-24-2009

I spoke to my lender because he said he had an apprasier and it would be done in about a week. I asked if it had been done and he said no that he is looking for an apprasier.(Previously he said he had one) I had to pay $425 to the lender for the apprasier. Can you get your own apprasier?

Jazzzy · ‎10-24-2009

@Desert-Rat wrote:

Most likely, it's not the Appraiser's fault.  It's the fault of the AMC's not being able to find an appraiser that will work cheap enough to suit them.

Is this normal? Yes. It's the new normal, since May 1, 2009. This is due to a poorly thought out regulation (Home Valuation Code of Conduct) which was supposed to help borrowers but has severely hindered many.The loan officer cannot contact or have any contact with the appraiser.

Appraisals are ordered through an "Appraisal Management Company", which are for the most part owned by the banks.  They charge more and pay the appraisers peanuts. My first appraisal in March cost 350.00, directly to the appraiser. The second, through the AMC October 10th, cost me 575.00. (I asked the appraiser what he gets paid? He got 250.00.)

Google "HVCC complaints".   You'll find a lot of them. One of the biggest is the fact that YOUR appraisal, that YOU paid for is not transferable to another lender, it requires a new appraisal if your financing falls through for any reason, And......at YOUR expense.) It makes rate shopping very expensive.

There may be light at the end of the tunnel soon. There is legislation being pushed through to eliminate this ridiculous "consumer protection" farce. I just hope it happens sooner rather than later for the sake of folks trying to purchase homes.

Please post again to tell us how this works out for you, and Good Luck!

D-R

We have found appraisal fees to be regional and market driven. While appraisal management companies may offer low fees to the appraisers, they have to find an appriaser to accept those lower fees. In our region, fees remain the same. My husband actually makes higher fees reviewing appraisals that other appraisers have done. I think the appraisal management companies are learning that you get what you pay for.

It will be interesting to see what they do with a new appraisal law. Something had to be done to keep lenders from influencing and "buying" property values. In the past, lenders' influence on appraisal values had gone too far and was often egregious. Homebuyers were victimized by lenders wanting to close deals. In the past, my husband would get a call or email asking him to do an appraisal only if he could come up with a certain value. In other words: I'll hire you, but only if you give me this $$$ amount on the property. This is part of the reason that so many homeowners are now under water on their mortgages. This, of course, was not true of all loan officers or all banks, but that led to the new regulations to try to fix this problem.

Today, if lenders don't get the value they want from the appraiser, on some loans lenders have the ability to appraisal shop...they hire another appraiser and try again. This normally costs the borrower two appraisal fees, unless the lender is willing to eat the cost of the appraisal they didn't like. Often, the borrower is told that they got a bad appraisal, instead of being told...well, yeah, the value was spot on, but we actually need a higher value in order to close your loan. Appraisers make easy punching bags because they're not at the table.

There are problems with the new regulations. As in a lot of legislation, in trying to cure one problem, they've created another.

Jazzzy · ‎10-24-2009

@Anonymous wrote:
I spoke to my lender because he said he had an apprasier and it would be done in about a week. I asked if it had been done and he said no that he is looking for an apprasier.(Previously he said he had one) I had to pay $425 to the lender for the apprasier. Can you get your own apprasier?

Well...lenders shouldn't "have" their own appraisers any longer. That's part of the buddy buddy network the new legislation was meant to break up. (The new regulations don't cover all types of loans, so much of what I've said depends on what type of loan you are getting.)

You can't hire your own appraiser in this case where you are getting financing. The lender and the homeowner are both supposed to be able to rely on the value given by the appriaser, so they won't let the individual go out and hire a friend either. It's supposed to be hands off by both parties. In the past, borrowers could request a certain appraiser, and the bank often would honor that request.

Appriasers are often hired by individuals for various reasons...but not in this scenario.

Message Edited by LynetteM on 10-24-2009 06:45 AM

Anonymous · ‎10-27-2009

Well we got the appraisal back and there are no issues, sailed right through. What a relief. Now its off to the USDA so i guess i can start incessantly worrying whether or not I will get THEIR approval

Thanks to all that explained the new rules regarding loan officers and appraisals, I really thought my LO was feeding me a line of you-know-what when she said she cannot even talk talk to the appraiser. That has to be very frustrating for a loan officer, to be at the mercy of someone else in order to do your job efficiently and then you can't even follow up with them directly to make sure they're doing it!

Desert-Rat · ‎10-27-2009

Thanks for letting us know! Clear sailing sounds good. Shouldn't be long now before you close.

Congrats,

D-R