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Keep ACE Up Your Sleeve

National Mortgage Professional
Dec 31, 2001

How to select an appraiserAllan E. Brediceappraiser, selection, qualifications Finding the right appraisers can be the key to a smooth running closing process for lenders. So, how do lenders evaluate whether an appraiser is right for their institution? Those who are the most productive and accurate, and are the easiest to deal with share several traits. Here are a few factors to consider when evaluating an appraiser: No substitute for experience Look for an experienced appraiser. You cannot measure an appraiser solely on the length of time he or she has been in the business (although that's certainly important). You should also look at licenses and other designations, such as commercial or residential designations. Work samples All lenders should ask for sample reports from appraisers before hiring them. Look for the accuracy and consistency of the report. Look at the quality of the report. For example, investigate how they selected comparables and explanations if there were limited comparable homes available. Appraisal reports should tell the whole story and be written as if the lender were not familiar with the area. A well-written appraisal report should make readers feel as if they had personally visited the property, regardless of their geographical location. Communication, communication, communication Look for strong communication skills. Good appraisers communicate well with the lender. They inform the lender of when an inspection day and time have been set. If they anticipate problems as they are writing up the report, these problems must also be communicated thoroughly and in a timely manner. Good appraisers are willing to satisfy their clients, while still conforming to their uniform standards of professional practice. If there is a conflict between the appraiser's standards of practice and the lender's guidelines, both parties must be willing to be as flexible as possible to resolve the matter at hand. We are all moving very quickly in this market, and things must be done in a reasonable period of time. The major key to making that work is good communication between the lender and the appraiser. Despite any disagreements, we need to make the effort to understand each other to ensure tight turnaround times. References make the world go 'round Ask for references from all appraisers and take the time to check them out with your own sources. Check with the state. All states keep records of violations and disciplinary actions. Technology is here to stay In today's market, appraisers must be comfortable with the recent advances in technology. Lenders should look for appraisers who can transmit reports via the Internet and communicate statuses comfortably via e-mail, rather than making the lender continually attempt to contact them by phone. In the old days, mapping meant a great deal of map copies and yellow "stickies." It is not cost efficient for both the appraiser and the institution to conduct business in such a manner. Today's good appraisers use mapping technologies offered over the Internet. Only deal with appraisers who are technologically aware. Local knowledge is good knowledge Select someone who knows the area. When opening up a new area, recruit appraisers who already understand the territory. Ask what their territory is and then fit them in. Some appraisers can cover an entire county, while others are more comfortable covering three towns. Most appraisers are part of a network defined by a territory within the radius of their homes. This is a good policy for lenders to follow when selecting their own appraisers. Current knowledge is essential to success Make sure that you are working with appraisers who value ongoing professional development. They should regularly attend education courses, sit in on seminars through appraisal organizations and broaden their knowledge through related college courses. This is not a field where you learn things once, and then you're done. Although licensing requirements vary by state, all require continuing education. For example, the State of Connecticut requires 28 hours every two years. If an appraiser holds the MAI or SRA designation, they are required to take 100 hours of continuing education every five years. The pros have it Professionalism is a tough word to define, but an easy trait to spot. You will find it in the little things. When evaluating appraisers, consider: •Do they arrive on time? •Are they neatly dressed? •Do they present themselves as individuals who welcome communication? •Do they demonstrate an understanding of the need to treat the homeowner with respect? These factors are very important. While appraisers shouldn't discuss the value of the home with the applicant, they should give compliments and pay attention to the improvements that the homeowner has made to the property. Rushing through the home and ignoring the homeowner demonstrates disrespect and reflects badly on the lending institution. Appraisers must have the ability to put themselves in the shoes of the applicant--who is paying for the appraisal. An appraiser who comes and goes in five minutes without taking the time to take notes and listen to what that applicant has to say about the home, shows no respect. All of us who deal with appraisers recognize that they are very independent types. Most are independent contractors because they prefer to be. However, this doesn't mean that they have the right to act in an unprofessional manner. Your appraisers are a representation of your institution, and they should positively reflect on the way it conducts business. Allan E. Bredice, SRA, is vice president of the appraisal division at Integrated Loan Services. He may be reached at (800) 842-8423 or visit www.ils.com.
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