“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. “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.”
It’s a system brokers have had to deal with for years, but fewer lenders than ever are allowing brokers to deal directly with appraisers and are, instead, forcing them to go through appraisal ordering companies that appoint appraisers using a bidding system.
Brokers complain that this extra step costs the client more money (by $50-$70, according to one broker estimate), slows down the home buying process, and often results in an inferior appraisal; added steps and costs with no added benefit of more oversight.
And with one of his preferred lenders recently moving to disallow broker-appointed appraisers, Sean Binkley of Dominion Lending Centres Alliance believes those few lenders who stick to the old system will have a competitive advantage.
Fewer lenders are allowing brokers to choose their own appraisers, and players are once again airing frustration about the appraisal process; a process one appraiser refers to as “a total racket."