Real Estate Appraisals: What’s Up & What to Do - METROPOLIST

Real Estate Appraisals: What’s Up & What to Do

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Loads of issues are happening with real estate appraisals lately…have you noticed?

Mostly around “getting them done.” At the Lender Think Tank clock hour class in January, we heard from 3 local pros about the state of appraisals, plus your best option if you have an appraisal come in low.

 

You may have noticed

A big jump in price & time to perform?

And our businesses as brokers are impacted by the state of the appraisal industry. Time to perform and a shortage of local appraisers.

 

Why is that?

This industry has recently undergone a massive change. One that actually changed the way real estate appraisers conduct their businesses.

 

Simply put, appraisers are now contracting with Appraisal Management Companies (AMCs) instead of working in direct contact with the lenders.

 

Imagine it

With the introduction of AMCs, appraisers who were in business, with flowing and intact relationships, were cut off from the entire book of business they created and worked from.

 

So, lenders now contract with AMCs and will submit orders for appraisals to be conducted, but no contact is made, other than updates that will come from the appraiser.

 

This also means that across lender companies, there may be differing pools of appraisers, depending on who the lending company affiliates with.

 

Why?

The assignment of appraisers is designed to be random with AMCs. This avoids the “influencing” problem that had happened in the past.

 

Fewer local appraisers are actually available right now

The pool of appraisers has been drastically diminished with the requirements necessary to enter the job industry as an appraiser as well.

metropolist learning lab home interior appraisal

To become an appraiser, you need:

  • A college degree or equivalent of certain material to pass
  • 2k hours logged as an apprentice with an existing real estate appraiser

 

Not many people are becoming appraisers because of the 2k apprentice hours needed. Both the professional appraiser and the apprentice must be present in order for hours to “count”.

 

So what?

The appraiser who’s already in business doesn’t have much of a benefit available to take on an apprentice.

 

And the apprentice will usually need some form of stable income during the apprenticeship, or a means of making it. Challenging, as 2k hours equates to a year of full time work.

 

More factoids about the state of appraisals in WA:

  • Average age of the 275 total appraisers in WA state is 58.
  • There are a total of 14 serviceable AMCs: national & regional.

Consider the possibility that a national AMC isn’t as familiar with our local markets.

 

When you get a low appraisal and a lender won’t contest it, what should happen?

When this happens with lender, Rob McAllister of West Seattle Mortgage, Inc., he actually chooses to start over.

 

Hasn’t had great success in fighting or contesting, but repackaging and sending out to another lender will, many times, deliver an appraisal more quickly than fighting the original one.

 

Main takeaway about contesting a low appraisal

Contesting an appraisal isn’t a fast process.

Success can happen when you contest a low appraisal. But again, it’s not fast.

 

Talk with your preferred lender about the appraisal process. Ask how you can help to make the financing talks as easy, smooth and fast as possible.

 

If you don’t have a preferred lender, feel free to call one of our vetted local lending pros:

 

 

Ready for more recap on the debut Lender Think Tank Class that happened in early January? Check it out (link)

 

And count yourself invited for the upcoming Marketing Without Money Clock Hour Class in March!

Register today!