20 Jun 5 Appraisal Tips For Speeding Up The Process
Appraisal– it is a word that strikes fear in lenders, home sellers, borrowers, real estate agents, and anyone else in the mix. There is no denying that it can give loan origination professionals a few heart palpitations from time to time. Appraisals, however, are a necessary component for protecting the lender from disbursing more mortgage than the value of the property. If the crash of 08’ has taught us anything, it’s that the regulatory environment needed to be upended, but for good reason. A national appraisal management company like Arivs has become more imperative to the process than ever before. Today, we would like to provide some guidance on 5 appraisal tips for speeding up the process.
#1- Keeping Track Of Documentation
One of the biggest reasons for the delay in reports is due to a lack of or mismanagement of documents. This leaves many feeling perplexed, since the appraisal process has been running like a well oiled machine, for quite some time now. Still, it does not exempt the likelihood of something being inundated with misstep, from time to time. Appraisals can be ordered too early, too late, or without the proper documentation the appraiser needs, increasing the chance of delays. First things first. To speed up this process, it all begins with taking care of matters before the appraisal order is sent out. Coordinate with the borrower, realtors, and your title rep, and ensure that you have a purchase agreement that is signed and detailed by both parties.
#2- The Type Of Property
Some lenders will require that the product type on the engagement letter should match the appraisal uploaded, as a means of ruling out any uncertainties. Assessing the property type is paramount, as every lender will not vest a personal stake in certain types of properties like, say, manufactured homes.
#3- Contact Information
Ensure that the appraiser has the correct contact information and that your borrower is not going to be indisposed, anytime soon. When an appraisal order is received, it’s important to have the right contact information handy, so that the appraiser does not run into issues when needing to communicate with the main point of contact. Something that our national appraisal management company will continually drive home!
#4- Factoring In Repairs
Believe it or not, home improvement projects can delay an appraisal process in more ways than one. This is especially true if the borrower has not kept you posted on the latest renovation projects, even after you’ve ordered the appraisal. The appraiser should get in touch with their client and see if they truly want an as-is appraisal. Most of the time, the loan officer is completely unaware that the borrowers were in the middle of home renovations, so it naturally throws them for a loop. It could take a few days for them to decide on how they want to move forward. And, depending on the level of renovation or remodel that’s needed, it might mean the appraiser now has to search through new comparable sales that further delay the process. By continuing to have these conversations when you are conversing with a borrower and always ensure if any repairs or renovations are on the horizon.
#5- The Ordering System
On the subject of how appraisers receive assignments, let’s look at the two most common ways, as well as a hybrid version.
- Direct Assignments: These assignments come directly from a lender to an appraiser. The loan officer or the representative sends the order to the appraiser, and once the report is finished, the report is then emailed back to the same person. Sometimes, lenders will choose to employ a compliance officer or separate appraisal department to send and receive appraisals, which serves to provide a layer of protection against undue influence.
- National Appraisal Management Company: The majority of large lenders use a third party system known as Appraisal Management Companies or AMCs for short. Despite their long-stance in history, their popularity came into prominence after the 2008 crash. What an AMC does is very similar to what a compliance officer does, although there are additional layers of protection. Most of these entities are completely unrelated to the financial institution. How it works is like this– you send Arivs the request for an appraisal, and they then select an appraiser for you, who is on the list of their approved appraisers. Sometimes, this choice is arbitrary and in other cases, it can be based on a scoring system, or they might choose whichever appraiser they feel comfortable working with. When that report is completed, the appraiser will usually email it or upload it to the AMC portal. After that, there is a good amount of variance.
- The Hybrid Model: This model blends elements of both aforementioned models. Simply put, it’s just a portal. Either the lender or their representative uploads an appraisal request to the portal and then assigns it to an appraiser at that time. Everything the appraiser would need is easily accessible from this medium
Managing The Appraisal Process With Our National Appraisal Management Company–Arivs
We hope you gained some valuable insight on what we believe are the 5 best appraisal tips for speeding up the process. If you wish to take this a step further in guaranteeing uniformity and professionalism, the team at Arivs is here to assist. Our national appraisal management company is ready to handle all appraisal tasks. Contact us today to learn more about starting!