From the appraiser's perspective: Who's team is the appraiser on?Charlie Elliott Jr., MAI, SRAAppraisers,Lenders
Is your appraiser always on your team? Often, the appraiser is
the person with bad news: the one who reinforces or kills the deal.
It is unethical to influence an appraiser's decision, and many of
them seem to develop an attitude if their work is questioned in
even the smallest way. The lender/appraiser relationship is often
stressful, given the roles that each one plays. Stress seems to be
an everyday occurrence between some lenders and their appraisers,
despite the fact that each is dependent upon the other to put bread
on the table for their families.
To most lenders and appraisers, none of this is late-breaking
news. In many cases, our relationships are like a bad marriage.
Neither party is satisfied with the other, but getting a divorce
may seem to be a worse option than just holding our nose and living
with a less-than-desirable situation. And yes, there is the
temptation to try a greener pasture from time to time, mostly to no
avail. Don't misunderstand me, there are many lender/appraiser
relationships that work well, where each party is pleased, or at a
minimum, accepting of the relationship. Just like marriages, there
are also those professional relationships of convenience, where
each party is less-than-fulfilled.
It doesn't have to be this way. Like a successful marriage, it
takes commitment to make the best of a relationship. A mix of
psychology, strategy and common sense on behalf of the lender can
go a long way toward greasing the wheels of the relationship.
For those lenders interested in having a smoother relationship
with their appraisal provider, there is hope. Listed below are a
few questions that lenders can ask themselves to evaluate your
†Is my current appraiser deserving of my business? Is my
†Do I have realistic expectations of my appraiser?
†Am I willing to pay my appraiser a fee that is equal to
or higher than the market?
†Am I a seasoned professional, or do I come across as a
"know-it-all," who actually knows very little?
†Do I deal with quality clients?
†Am I thorough in providing the appraiser with details
about the property, the specific type of appraisal, the type of
loan, copies of contracts of sale, etc.?
†Do I attempt to use the same appraisal vendor for most or
all of my work?
If your appraisal vendor is not on top of their game, fire them
and hire someone who is. Your business should be appreciated and it
is worthy of investment in a competent vendor.
Having realistic service expectations will pay dividends toward
a smoother relationship, as well. For an appraiser, there is no
greater frustration than a lender who waits until the last minute
to order a rush appraisal, or expects a $100,000 property to be
appraised for $150,000. A conscientious appraisal provider will
work hard for their compensation, in many cases investing more time
than the fee warrants. It is my contention that the extra few bucks
paid for a service generates the highest return. If the appraiser
sees the lender as a cheap corner-cutter who is unwilling to pay a
fair price, service will suffer. That extra $25 or $50 can be worth
hundreds or, in some cases, thousands of dollars to the lender,
when the alternative is considered. A professional, humble approach
will endear the appraiser to you. The lender who overplays his hand
and comes across as a "know-it-all" (especially when their
knowledge is limited), tends to shoot himself in the foot.
Appraisers do not respond positively to lenders who always
associate with marginal borrowers. You know the type borrower we
are talking about, here--the one whose house has a lot of deferred
maintenance, the one who wants to obtain a larger loan than his
house is worth, etc. This may not seem to be a big deal, because
those people need loans too, right? Let's remember to keep our eye
on the goal of having smooth transactions, while promoting team
play with the vendor, thus creating the best return on the
resources invested by the lender.
It has been my experience that many lenders are hesitant to
provide the appraiser with all the information available when
ordering an appraisal. This is not to say that all lenders do this,
but it is all too often the case. If we want our appraisers to act
as team players, then it is important that they see the playbook.
If we claim that the property is under contract for $200,000, then
send the appraiser a copy of the contract. This would hold true for
almost any information that provides an indication of the
property's condition or value. Providing the appropriate paperwork
is a signal to the appraiser that you trust them with all the
information available to you, and that you have included them as a
player on your team.
Finally, appraisers--just like anyone else offering a
service--dedicate themselves to those who favor them with material
business volume. This holds true, particularly where those
difficult assignments come into play. Additionally, the more
experience an appraiser has with a particular client, the better
the appraiser will understand the needs and requirements of that
client. Therefore, better service and quality may be expected. The
key to a smooth lender/appraisal relationship is to approach it as
a team effort. Communication, openness, dedication, loyalty and
compassion on the part of the lender can go a long way toward
insuring that the appraiser is a true team player and, most
importantly, that they are on your team.
Charlie W. Elliott, Jr., MAI, SRA, is president of ELLIOTT
& Company Appraisers, a national real estate appraisal company.
He can be reached at (800) 854-5889, [email protected]
through the company's Web site, at www.appraisalsanywhere.com.