Let The Borrower Pick The Appraiser

[Meandering]

Why????

Because who is going to call the appraiser and ask for all the report revisions, like, if there are income producing crops growing under the snow, or if the shed has peeling paint on the inside, or if the home with the foster child down the street impacts the value, or if the home with the wheel chair ramp is being used as an assisted living facility and impacts value in the neighborhood?

Who is going to call the appraiser and ask about 5 other sales 10 miles away that Chucky thinks are better comps than yours?

Who is going to tell you that $200 is the appraisal fee, 'cause that's what all the other appraisers charge in the area>

Who is going to email you every six months to ask for your E&O renewal, or your license renewal, or your background check?

Nope, you can't let borrowers get in the way of all these important communications between their client's and their client's agents.

.

 

[ucbruin]

Yeah well sadly that is the case. not all appraisers, but enough to matter. And too many borrowers are greedy, cheap and moreover do not understand appraising, meaning they will hire the cheapest or those who promise a higher value much of the time.

A system such as this will allow you to market your services. At least the borrower, if he chooses, has the option to hire an appraiser based on several factors, fee being only 1 factor.

 

[ucbruin]

Because who is going to call the appraiser and ask for all the report revisions, like, if there are income producing crops growing under the snow, or if the shed has peeling paint on the inside, or if the home with the foster child down the street impacts the value, or if the home with the wheel chair ramp is being used as an assisted living facility and impacts value in the neighborhood?

Who is going to call the appraiser and ask about 5 other sales 10 miles away that Chucky thinks are better comps than yours?

Who is going to tell you that $200 is the appraisal fee, 'cause that's what all the other appraisers charge in the area>

Who is going to email you every six months to ask for your E&O renewal, or your license renewal, or your background check?

Nope, you can't let borrowers get in the way of all these important communications between their client's and their client's agents.

.

The borrower will only get to pick the appraiser.....

 

[hastalavista]

You posted your thoughts if we suspend reality, and many disagree.

Ethical behavior/standards of the appraiser has nothing to do with my response. It has everything to do with the type of client I would prefer to have my engagement with. The same ethical challenges exist regardless of who the client is.
Give me a dispassionate client over a passionate client every day of the year.
Obviously, when doing private party work (litigation, let's say), there is a lot of passion/emotion that is usually attached to at least one of the litigants. In that case, I prefer to work with the attorney. But sometimes, I do work for the litigant. I can tell you for a fact that based on the type of litigation and the circumstances involved, that may impact my fee.
I don't have to worry about that if, for a mortgage-finance transaction, I'm engaged by the lender. It isn't the house they live in that didn't come in at what they think it is worth, and as soon as they decline the loan which is part of my assignment, they will move on to the next one.

You asked

If that could happen would appraiser be at peace with this system???

No, I'd prefer that not to occur.

If you don't like the answer, I can understand that. But your implications as to why someone would answer counter to what you may or may not like is unfounded (although it may reflect your view) in my not so humble opinion.

 

[Terrel L. Shields]

we don't bother bidding simply because we could put anything and the borrower is going to opt for their favorite guy.

True enough, small banks do bypass the so-called firewall way too often. OTOH there is a Realtor-builder who has lied to me one too many times, and, I refuse to deal with anything involving them, either privately or in their office or agency.

 

[hastalavista]

The borrower will only get to pick the appraiser.....

And, furthermore, that part (your quote above) already happens within the current system to some degree.
A lender gets 4 bids for an assignment; they range in fee and turn time. The appraisers are all from the bank's panel.
The lender turns to the borrower and says, here are the bids from our appraisal panel (the appraiser's names are not included); since you are paying for it, do you have a preference?
Sometimes speed is critical to the borrower, sometimes fee is critical to the borrower, and sometimes neither is that critical to the borrower.
When the fee or turn-time is critical, they have the opportunity to select on that basis.
When neither is especially critical, many will not pick the low or high bid, and pick in the middle.

If the property is so unique or the circumstances unusual, the lender may get the bids and determine that one or two of the four might be the best choice and reduce the selection to those two options.
Certainly, for very unique circumstances there may be one go-to appraiser.

So, what you hypothesize (above) does happen in the lending world right now.
What the borrower doesn't do in the current system is directly negotiate with the appraiser for the fee and turn time. If such a system were an option, I'd be opposed to it for the reasons I've already stated.

 

[ucbruin]

And, furthermore, that part (your quote above) already happens within the current system to some degree.
A lender gets 4 bids for an assignment; they range in fee and turn time. The appraisers are all from the bank's panel.
The lender turns to the borrower and says, here are the bids from our appraisal panel (the appraiser's names are not included); since you are paying for it, do you have a preference?
Sometimes speed is critical to the borrower, sometimes fee is critical to the borrower, and sometimes neither is that critical to the borrower.
When the fee or turn-time is critical, they have the opportunity to select on that basis.
When neither is especially critical, many will not pick the low or high bid, and pick in the middle.

If the property is so unique or the circumstances unusual, the lender may get the bids and determine that one or two of the four might be the best choice and reduce the selection to those two options.
Certainly, for very unique circumstances there may be one go-to appraiser.

So, what you hypothesize (above) does happen in the lending world right now.
What the borrower doesn't do in the current system is directly negotiate with the appraiser for the fee and turn time. If such a system were an option, I'd be opposed to it for the reasons I've already stated.

So, what you hypothesize (above) does happen in the lending world right now.
What the borrower doesn't do in the current system is directly negotiate with the appraiser for the fee and turn time. If such a system were an option, I'd be opposed to it for the reasons I've already stated.

The borrower would have the option to negotiate fees/turn times with SEVERAL appraisers on the lender's approved panel....

I've no reason to not believe what you have stated....
If what you stated is the existing system....
Why the hubbub and push back????

But you have to admit....
The system you detailed and say already happens....
Must cause a huge blockage in the pipeline as the lender has to wait for the borrower to decide which appraiser best meets his particular need(s).....

 

[TRESinc]

Yeah well sadly that is the case. not all appraisers, but enough to matter. And too many borrowers are greedy, cheap and moreover do not understand appraising, meaning they will hire the cheapest or those who promise a higher value much of the time.

so you are saying that the borrowers would do the EXACT same thing that you accuse AMCs and lenders of doing yet you want them to stop it under the guise of "public trust". amazing world you live in...

 

[ucbruin]

I know the OP isn't big on hearing about commercial, which makes me doubly eager to interject my thoughts on that side Whether admitted or not, borrowers often choose appraisers more on the commercial side, particularly for the smaller banks. They don't usually call to interview, but often they have preferred appraisers and not coincidentally, that appraiser is probably going to be the one doing the work. There is one client that sends over bids and when we see that so-and-so owns it, we don't bother bidding simply because we could put anything and the borrower is going to opt for their favorite guy.

It's not that I'm not interested in hearing the commercial side/POV...

If you recall, I did say that many times comments provided by CGs are based upon their experience of some extreme commercial assignment for a non-complex residential issues.....

 

[hastalavista]

I've no reason to not believe what you have stated....
If what you stated is the existing system....
Why the hubbub and push back????

(my bold)

Simple: Because I strongly disagree with the broad brush of this post:

1. It's obvious to me that folks haven't read or didn't comprehend what I wrote....
2. It's obvious to me that folks must believe that at their core, appraisers are unethical and can't be trusted to perform a credible report and providing an honest opinion of value.....

That's sad....

But you have to admit....
The system you detailed and say already happens....
Must cause a huge blockage in the pipeline as the lender has to wait for the borrower to decide which appraiser best meets his particular need(s).....

While I didn't make this clear in my post, I suspect I'll have to make it clear now:
The system I detail and can confirm already happens does not happen in all cases and for all lenders.
It does happen and does not cause a huge blockage in the pipeline for those lenders I know who use such systems.
But they are not trying to close the loan yesterday either.

Ps. I'm talking residential here.