Broker finds workaround for appraisal management services

Broker finds workaround for appraisal management services

Broker finds workaround for appraisal management services Brokers frustrated by appraisal management companies may want to take a page out of one professional’s playbook for dealing with lender demands.

“I have let all my lenders know I will not deal with them if I have to use an appraisal ordering system, (and) I have managed to get exemptions from four lenders that insist on [using them],” broker Curtis Glenn wrote on MortgageBrokerNews.ca. “I have told the lenders I will go somewhere else with the file. I after 21 years as a broker if they do not trust me then I won’t use them. If every broker said no, [these appraisal companies] will go away.”

It’s a tactic that may only work for seasoned, high-efficiency brokers but one more industry players are likely to try as frustration with appraisal dispatch companies grows.

Several brokers have complained about delays and unexplained extra costs when dealing with these companies.

“Up-charging of fees is a big issue,” commenter Michael Rice wrote on MBN. “Insist the [lenders] enter into a one fee for all deals. It eliminates the nickel and diming effect from the appraisal companies.”

The suggestion comes in response to a story about the dwindling number of lenders who allow brokers to select appraisers for deals. Most are now using middleman companies accused of farming out contracts to those appraisers coming in with the lowest bids.

It’s a process that has long frustrated brokers as well as appraisers, who feel their business is being degraded.

“What really they are is a glorified call centre and they swear to the bank that they’re going to send the appraisal to the best fit per job based on approved lists … what they really do is they send it out to the [lowest bidder],” Derek Dupuis, an appraiser with S. Rayner and Associates, told MortgageBrokerNews.ca Tuesday. “They send it out to the appraisal companies that they have managed to sign contracts with for low, low rates. Like rates that we charged in 1992.”
32 Comments
  • Agent 2015-04-02 11:38:34 AM
    I have done the same- when appraisals go into a bidding war for the file- you don't always get the best result, Many, many times they come in lower, and you have no recourse as you are not allowed to speak to the appraiser- it has been paid for and sent to the lender. One lakefront property came in 100 K lower than any other recent sale- Finally got him up 90k after a week of back and forth. He wasn't happy I called- paid extra as well for his 45 min drive because he picked it up in the que. I understand why lenders went this route but I agree after 20 yrs you better trust me.
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  • Laurel 2015-04-02 12:07:28 PM
    Bravo! I have for the past 15 years developed relationships with 3 local appraisers that know their markets, are efficient, and always give me and my clients excellent service. They are very experienced, accredited senior appraisers. I have taken the steps to request them when forced to order through a service. The frustrating thing is that we pay a higher cost so the service can take their cut, and we are getting the SAME report (with a slower turnaround) that I would get if I ordered it direct. I agree, it is time for lenders to trust their brokers on this. All appraisers are licensed and accredited. I do not see the issue.
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  • @kiltedbroker 2015-04-02 12:16:19 PM
    Just a thought... but what if lenders started to include appraisal options with status account brokers? That might be a way to keep the system in place for brokers who don't do a lot of volume with a certain lender while showing trust to the brokers who send a fair deal of volume.

    So if you are a CEO with Street Capital or a Wizard with First National, you can choose to use the appraisal system or order it directly through a qualified appraiser of your choice.

    That right there could be a great compromise!
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