Are Appraisers Hindering the Housing Recovery?   

are appraisers hindering the housing recovery
A recent WSJ article argued that appraisals are hindering the housing recovery.  I understand the statement that value is whatever the seller and buyer decide it is and appraisals can be contradictory.  However, we all know our market is far from a hypothetical ideal.  Appraisals are an important part of the home financing process and are here to stay.  One piece this article misses is not all lenders order appraisals through an AMC as described.   If you're concerned about appraisals hindering the housing recovery you should know that with a different process, you may have a different result.

True, Appraiser Independence prevents me from calling a trusted appraiser to get their thoughts on a property or discussing an ETA for their report – contact is routed through our main office.   And honestly I miss these conversations because my appraisers were valued partners in my business and I appreciated their expertise. 

One significant adaptation to these requirements is we established our own approved appraiser list for our major markets and do not outsource through a large AMC.  When HVCC began, our senior staff asked us which appraisers we worked with and respected.    They then reviewed numerous reports from these appraisers and further evaluated their caliber.    We chose appraisers who are experienced and seasoned.   It is from this pool that we assign our appraisals – not to a large group of strangers.  

We have 23 appraisers who serve us in Charlotte and the surrounding areas.  They have provided over 445 appraisals year to date.  When I receive a client’s appraisal, I know the person who stands behind the report and trust their work.

With the upcoming Uniform Appraisal Dataset (UAD) standardization guidelines starting on September 1st, it’s even more important that our clients have an accurate and quality appraisal.   In light of these changes, even if you don’t know your buyer’s appraiser - it’s critical that your lender does.

Looking for a trusted lender who delivers an accurate appraisal?  Visit rebeccamadej.com and let  Cunningham & Company Mortgage Bankers show you how we help our communities avoid appraisers hindering our housing recovery. 

Rebecca MadejRebecca R. Madej , NMLS#91445
Branch Manager/Mortgage Consultant
Licensed in NC, SC, TN & VA

Cunningham & Company Mortgage Bankers
2101 Rexford Road, Suite 131-E Cunningham & Company Mortgage Bankers
Charlotte, NC 28211

704.488.8883
704.366.7711 (O)
704.366.8822 (F)

www.rebeccamadej.com 
rebeccam@cunninghammortgage.com

 

39 Comments on Are Appraisers Hindering the Housing Recovery?

20 Most Recent Comments Displayed Show All

SEP
03
2011
227,197 Points 8 Featured Posts Outside Blog

I live in a small town and the pool of appraisers is small so they extent often to the next town. That poses a conflict for they often do not know our market.  
9:18pm • #20
648,186 Points 63 Featured Posts Localism Sponsor Outside Blog Called Shot Master

These days its a crap shoot.  I had one apprasier ask me for directions to the thruway...and it was just two turns away. The hadn't a clue about the area!  Seriously?  How are they supposed to understand the market if they don't know the market...?????
9:19pm • #21
1,352,178 Points 42 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

I regret the loss of my trusted appraiser and never know what we'll get now with many out of area appraises.
9:36pm • #22
135,571 Points 2 Featured Posts

I would have to say they are adding to the mess for sure.  They are calling out stupid stuff just so they can get a second inspection (442).  But is it really their fault?  They are being abused by HVCC rules and the companies that take half of their money, so they are just trying to survive.  It really comes down to we all need to be better, and learn to live on less for sure. 
9:50pm • #23
564,491 Points 2 Featured Posts Outside Blog Called Shot Master

Personally, I think BPO agents are what is really hindering the transactions.

When a short sale lender puts more value in the BROKER PRICING OPINION than in a licensed and state certified appraiser, this is where the problems come.

Opinions should never carry more weight than appraisals, but they do in short sales.
10:03pm • #24
SEP
04
2011
156,802 Points 1 Featured Post

Thanks for posting. I appreciate the way you and your company do business.
12:07am • #25

The banks current lending practices are hindering the housing recovery. Licensed appraiser deserve the same professional respect that many of us as Realtors work so hard to help our clients and customers appreciate and understand.

 

In the end the banks just want to hear what satisfies their criteria to make a loan and are happy to use appraisals that help them justify their decisions.
12:14am • #26
300,008 Points 7 Featured Posts Outside Blog Attended Rain Camp

Hi Rebecca, Welcome and congrats on your post and feature. I wish everyone used the same process your company uses. Some things would probably be a lot better now.
12:26am • #27
177,162 Points Outside Blog

Rebecca I agree with your statement about Appraisal Management Companies.  My company has set up their list of appraisers in the same way you describe in your post.  It works very well.  Hope to hear more from you.
8:33am • #28
975,239 Points 6 Featured Posts Outside Blog Attended Rain Camp Called Shot Master
That is a good idea to have a list or pool of valued appraisers. It is frightening to think they are not familiar with your country turf during a transaction.
8:44am • #29
1 Featured Post

Thank you everyone for the warm welcome!  

The appraiser selection process seems like a subtle factor in a home buying experience but in reality it can determine whether a home even gets sold.  

There's no doubt that in years past unscrupulous loan officers and Realtors would pressure appraisers to ‘hit a number’ and/or that appraisers would do so for other dishonest reasons.   HVCC and Appraiser Independence are meant to end these behaviors but as Meliville mentioned the cure can cause more problems.

Before the additional appraisal regulations, the majority of us conducted business the way it should be done – representing our client’s interests and advocating for an honest and accurate transaction.   Unfortunately we seem to be the ones left standing and paying the price for others’ mistakes. 

 
8:53am • #30
705,119 Points 56 Featured Posts Outside Blog Called Shot Master

There are some very good appraiser however with up comes down and with good comes bad. I have had several very bad appraisals recently that did not reflect teh current market and the comps were not the best possible. There is a distinct difference between homes in suburban Manchester with upper middle class neighborhoods and larger yards and great schoolks as to comps they used in the center of the city where homes average 100 years old and are very congested. It is important the appraiser knows the area and the value trends. Out of town appraisers are making a mess of appraialsa in our area
9:28am • #31
1,125,717 Points 90 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Appraiser selection is key. We see way too many appraisers coming in from out of the area, who don't know our market. That is a red flag yet we as brokers do not control that on our end. Good first post.
9:31am • #32
175,878 Points 5 Featured Posts Outside Blog

This is a great post, and I especially like the line, "if you're concerned about appraisals hindering the housing recovery you should know that with a different process, you may have a different result."  This is the key, and every good lender should be able to elaborate on the process they use to ensure that, in an imperfect appraising world, they are working hard to deliver the best report --- as it sounds like you and your company are trying to do.  This is not a time for rookies anymore, and it's nice to know there are other financing companies who are doing everything possible to facilitate sales in this market.  Great work.
9:45am • #33
730,389 Points 15 Featured Posts Outside Blog Called Shot Master

Rebecca, it sounds like you've got the process down with a good bank of appraisers you can work with and trust. Good approach. Welcome to ActiveRain!
9:56am • #34
861,177 Points 174 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Welcome to Activerain.  I wish we could, in California, do what you've done.  Here we can't use anyone we want, the appraisal is ordered by the bank, and we have little influence over the result.  Unfortunately, the biggest issue in California - discussed at the state board, is that appraisers from outside an area are rarely qualified to assess the value of the target property.  Personally, I think HVCC went too far and we should go back to the old system.
11:10am • #35
315,007 Points 2 Featured Posts Attended Rain Camp Called Shot Master

Its only natural for everyone to start blaming the appraiser when the sales value does not come in at the sales price.  The reality is that the comps are what they are.  There is a very specific set of criteria that must be followed when an appraiser determines what makes the best comp. 

Even though HVCC is now gone, its core principles still apply to all appraisal orders.  I would be very curious as to how agents define an appraiser as being "out of the area."  That seems to be a very common phrase to use when value does not come in. 
11:43am • #36
318,819 Points 4 Featured Posts Outside Blog Hit Router Called Shot Master

Welcome to Active Rain. I have been a member for several years, but did not do any blogging.  I have not started blogging so I feel new as well. Good post
9:23pm • #37
SEP
05
2011
1,142,706 Points 242 Featured Posts Localism Sponsor Outside Blog Hit Router Attended Rain Camp Called Shot Master

Hi Rebecca!  WELCOME to ActiveRain!  You're going to LOVE it here!  Post away, every time you come across an issue that you have occur in day-to-day business, address an issue in an email or just have something wonderful to share!  It's a great platform for not only getting the word out but, for networking too!  Please don't hesitate to call, email or text any questions/issues that you may have with regards to the Rain.  I've been around awhile and am more than happy to help!

GREAT post BTW...the topic seems to be the hot one in our business right now too.  I just had one to not appraise and the heck of it was that it was priced BELOW market value and had multiple Offers!  We had absolutely no worries about the appraisal whatsoever!  When we submitted our comparables as she had used nearly ALL distressed comps and in that particular community, 1 out of 8 sales was distressed and that's the only one that she used out of that community--not to mention, she gave that one 'credit' for being 'updated' and she never laid eyes on the property!  The subject property was FAR more updated and the $10K that she gave the foreclosure was $10K that should have been ADDED to the subject because I DID see the foreclosed property--NO comparison!  Amazing!  When we fought it, she dug her heels in and 'warned' the bank that the neighborhood was 'in distress' and warned them against lending in that community!!  I have reported her to every agency known to man and hope that she is no longer licensed.  She came from afar, did not have a Supra key and was completely incompetent.  That is totally unacceptable!  

Sadly, we are stuck 'complying' with this repeated stress to our already stressed sellers.  Okay, I'll step off of my soap box now!
12:25am • #38
SEP
22
2011
379,375 Points 1 Featured Post Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Rebecca, Thanks for Sharing, Congratulations on Your Featured Post & Welcome to the Rain! Active Rain is a great place to share your knowledge, expertise and thoughts, as well as network and learn so much from the vast pool of talent already onboard.

Welcome Aboard and Much Success!
11:25pm • #39

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Rebecca Madej: Lender in NC, SC, VA & TN

Charlotte, NC

More about me…

Cunningham & Company Mortgage Bankers

Address: 2101 Rexford Road, Suite 131E, Charlotte, NC, 28211

Office Phone: (704) 366-7711 x 11

Cell Phone: (704) 488-8883

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