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.
