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Mortgage Broker News | 05 Nov 2018, 08:38 PM Agree 0
A crucial facet of the mortgage application process is the appraisal report, but not enough brokers are paying attention to the details
  • steve | 06 Nov 2018, 11:08 AM Agree 0

    As well, items like occupancy, legal or illegal uses, are important to check and clarify before sending to the lender.

    The sales data needs to meet the lender requirement and good appraisal practice. Such as wrapping around the value range (sales higher and sales lower then value estimate) house sizes both larger and smaller then the subject house. No large adjustments without very specific comments on why.

    Sales have to be truly comparable. Comparing a 2,000 square foot sale to a 3,500 square foot subject may be cause to reject the report.

  • Nancy | 06 Nov 2018, 03:12 PM Agree 0
    I am interested to hear different points of view on this subject.

    How much influence does an Agent have in getting an appraisal revised if the appraisal is completed for the lender and the lender sees the appraisal at the same time as the Agent?

    Is it reasonable for an agent to ask an appraiser to redo their appraisal using different comparables if, for instance, an Agent orders an appraisal of a property located in a rural hamlet with good resale value and that agent has a good idea of values in that hamlet because they had an appraisal completed 3 weeks earlier just 3 doors down, but the appraised value comes back $60K less than anticipated because the appraiser used comparables from the rural area outside the hamlet? In this case, the agent did ask the appraiser if there was wiggle room in the value and the appraiser adjusted his value by $20K but did not use different comparables. The lender said that they would not use the revised appraisal because the appraiser did not revise the comparable properties used in the appraisal.
    • GW - Appraiser and appraisal reviewer | 12 Nov 2018, 12:49 PM Agree 0
      Theoretically there is ZERO "wiggle room" because the appraiser should be using the best and most suitable comparable sales in the appraisal and adjusting them properly. Once completed an appraiser is NOT ALLOWED to change an appraisal or appraisal report unless there is new data that was somehow missed when performing the appraisal. A big question is how do arbitrarily change the opinion of value without changing some information or correcting some other error? Mistakes occur and these can be corrected (a negative adjustment that should have been positive, or a misplaced decimal) but the appraiser must note what was changed and why before changing a value. To change a report otherwise is a violation of the standards wherein appraisers must not accept or perform an assignment where a specified result is required. In the example above it suggest that the agent has a good idea of values but it was only one appraisal and it may not have been the same type or property vis-a-vis style, age/condition, size, etc., and that property may not be reflective of the overall community.
  • Dave | 07 Nov 2018, 10:10 PM Agree 0
    David - Certified Residential Appraiser

    "Agents and brokers need to learn how to read the appraisal and understand what it is the appraiser is saying on the report before it goes to the lender".

    Since they are not the client, nor an intended user of the report in a mortgage transaction, the agents and brokers never get the appraisal report before the lender gets it so this would be impossible.
    • GW - Appraiser and appraisal reviewer | 12 Nov 2018, 12:56 PM Agree 0
      Many lenders order appraisals totally independent of the brokerage and realtor chain, and even independent of the local lending team, to ensure there is no bias and the appraisal is truly an independent view form someone who is not involved with a specific transaction. Furthermore, if the broker or agent is NOT listed as a client, the appraiser is not allowed to discuss the appraisal, in whole or in part, without specific written consent of the client.
  • Dave | 07 Nov 2018, 10:18 PM Agree 0
    Dave - Certified Residential Appraiser

    "Agents and brokers need to learn how to read the appraisal and understand what it is the appraiser is saying on the report before it goes to the lender".

    Since Agents and Brokers are not the client, or even an intended user of an appraisal report for a mortgage transaction, they never see the appraisal report before the lender, so this would be impossible.
  • Michele Hall | 12 Nov 2018, 01:33 PM Agree 0
    When I took my brokers course in 1990 we were taught about appraisals and how to read them. Also a a good broker, I often inspect the home prior to sending my appraiser out to the property. Its just good business in questionable circumstances .
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