I have noticed a few posts out there from Real Estate Agents wondering why the Mortgage Company needs to order the appraisal and not let the home buyer order it from his or her friends.

There are several answers for this, but the most relevant to today's market is simply that it is a good ANTI-FRAUD Policy.  Basically if you have a home buyer or home owner who is purchasing or refinancing a home and they want to use an appraiser that they know personally, there may be additional influence or pressure being placed on the appraiser by the home owner or buyer to arrive a specific value.

Another reason advise against the home owner or buyer ordering his own appraisal, is simply that just because an appraiser has a valid license does not mean that every lender must accept the value as determined by said appraiser.  Some appraisers are even blacklisted by certain mortgage lenders and if we can not use the first appraisal and have to order a second appraisal, not only does increase the closing costs to the borrower, it also SLOWS DOWN THE TRANSACTION.

There is a potential change in the appraisal ordering process coming in the future, which if it passes, would require that the end lender orders the appraisal and does not even allow the Loan Officer, or Mortgage Broker to order it.  If this passes, many of the smaller independent appraisers will have trouble staying in business.  Also the overall costs of appraisals to the borrowers will likely also increase, as the large national companies typically charge higher appraisal fees.

The days of the borrower choosing an appraiser may be over.  Of course they could have any appraisal completed on any home they like, but the lenders accepting them, that's another story.

Thanks for reading and I hope this was helpful.

James Mucci
 
Treeside Financial, LLC

www.treesidefinancial.com

www.ihirerealtors.com  - THE EVOLUTION IS HERE, WILL YOU EVOLVE TO SURVIVE OR STARVE?