ASA fired off quite the letter

[J Grant]

Would you pay for this service....
Would you recommend to family and friends that they pay for this service....
It would be tough to advertise the service and tougher to sell it....

That is the problem - appraisal is an upfront cost, and when it is cash out of their own funds, people are reluctant to pay - $500 upfront, yet those same people will go tens of thousands or more into debt to get a "free" service ( it was not free, it just was not paid out of pocket )

That is why RE commissions can easily be 10k or 20k or 30k etc-they are not paid upfront out of pocket, they come out of the proceeds at closing, and thus give the illusion of being magically free-

 

[DTB]

That is the problem - appraisal is an upfront cost, and when it is cash out of their own funds, people are reluctant to pay - $500 upfront, yet those same people will go tens of thousands or more into debt to get a "free" service ( it was not free, it just was not paid out of pocket )

That is why RE commissions can easily be 10k or 20k or 30k etc-they are not paid upfront out of pocket, they come out of the proceeds at closing, and thus give the illusion of being magically free-

Here's the billboard. OVERPAY BY 20K? MORE LIKE 40K

Monthly payment
$112
Total interest paid
$20,146
Total cost of loan
$40,446
Payoff date
Apr 2053

Call us, we can protect (key word) you from falling into a situation like this.

 

[ucbruin]

Here's the billboard. OVERPAY BY 20K? MORE LIKE 40K

Monthly payment
$112
Total interest paid
$20,146
Total cost of loan
$40,446
Payoff date
Apr 2053

Call us, we can protect (key word) you from falling into a situation like this.

Billboard....
Prospective customers will know the appraiser will be too old/feeble to walk around the property....

I guess billboard would work in STOP/go traffic....
Emphasis on STOP....

 

[J Grant]

Here's the billboard. OVERPAY BY 20K? MORE LIKE 40K

Monthly payment
$112
Total interest paid
$20,146
Total cost of loan
$40,446
Payoff date
Apr 2053

Call us, we can protect (key word) you from falling into a situation like this.

Most buyers in a purchase do not need to call an appraiser- all they need do is to decline the Waiver/value acceptance offer, and get the appraisal instead. A number of borrowers still want an appraisal due to the contract contingency, but the stakeholders would rather not see them do that -because omg a lender might lose a deal! Which is imo the crux of the waive program. It was not about saving the borrower money on the appraisal or saving time, it was about locking in a loan with no out clause anymore for an appraisal contingency.

The appraisal finance contingency, pre-printed in many contracts, protects the borrower. When the borrower "waives" that, they have to pay the purchase price and close, there is no out if an appraisal value is less than the purchase price. This is why imo the more palatable "value acceptance" is being substituted for the word "waiver"- to confuse the borrower by making it all warm and fuzzy. You did not just waive your contract out door protection, you signed on for this wonderful value acceptance.

 

[Essexfenwick]

Here’s the thing. Residential Appraisal will be a less populated but maybe more lucrative field for the survivors . If you stay …get an SRA. It’s not that hard but helps with the harder/more expensive kind of work.

The attack on residential appraisal is part of the last gasp for our currency. The can has been caught and there’s no more road. People are going to need to squeeze the equity out of their homes for the last few moments and the government wants the value high / process fast and seamless. It’s also an attack on small business which control freaks running Washington hate so it’s a win/win. Government insurance has removed all the guardrails of capitalism. Before insuring everything, people deposited in responsible banks and banks thoroughly investigated mortgage applicants and collateral. Now nobody cares if a bank is irresponsible / insolvent or if mortgages are crap because they are insured by money printer goes brrrrrrr. The government has caused mal-investment and the bubble of the ages and we are on the edge of the abyss. Appraisal is just a peon impediment that is a little canary in the coal mine that will not be tolerated when trying to wring out the last drops of unearned/fake prosperity from the slovenly, greasy fingered mess we voted for.

The whole country is going to be shocked and vaulted into a reality that only the resilient can handle.

 

[DTB]

Most buyers in a purchase do not need to call an appraiser- all they need do is to decline the Waiver/value acceptance offer, and get the appraisal instead

... for now

 

[J Grant]

... for now

A slick talking mortgage lender will not dwell on the downside, will just push the upside for a borrower to choose the waiver/value acceptance in a purchase
In a refinance it is not about waiving a contract protection clause, it is about will be did using the mortgage lender's own value estimate leave the borrower stripped of equity or underwater.

 

[ucbruin]

How will appraisers be able to convince officials/consumers that appraisers/appraisals prevent wild swings in Real Estate cycles....
Can't....

 

[J Grant]

How will appraisers be able to convince officials/consumers that appraisers/appraisals prevent wild swings in Real Estate cycles....
Can't....

Even with all the problems, appraisals, while they can't prevent wild swings,they mitigate them. The RE market is not (yet subject to wild, overnight swings like the stock market is. It usually takes some months, at least, for market pressures to see a result. But speeding things up on the valuation and closing end and title end ( they are stripping title diligence too,) might change that.

If conditions existed for true appraiser independence, appraisals could do a much better job of it. However, those conditions do not exist , were MIA in the last housing market crash, they existed for a brief time post HVCC, and have been eroding ever since.

 

[J Grant]

How Appraisal Contingencies Work​

Appraisal contingencies are inserted into purchase offers to notify the seller that the buyer intends to have the property appraised as part of their purchase—usually as part of the financing process. This contingency gives the buyer the option to back out of the contract if the property doesn’t appraise for the amount they offered to pay—without losing their earnest money deposit or facing other penalties.

When a homebuyer (or their lender) has an appraisal, they hire a licensed professional to examine the property and evaluate it in light of recent sales of comparable properties in the same area. The appraiser then issues a report of their findings to the buyer and their lender.

A home appraisal assigns an objective value to a property that’s being purchased. This is significant because most lenders aren’t allowed to lend more against a property than it’s worth.

That way, if the buyer defaults on their loan, the lender has a better chance of getting its money back if they have to foreclose.

Appraisal contingencies also can be waived if a buyer doesn’t intend to have a property appraised—if they’re paying cash, for example. Waiving appraisal contingencies makes offers stronger in the eyes of sellers because it signifies to them that the buyer doesn’t need the property to appraise for a certain value in order to close.

Appraisal Contingency Vs. Mortgage Contingency​

An appraisal contingency gives a homebuyer the option to back out of a purchase contract if a property fails to appraise for a certain amount. A mortgage contingency also gives a buyer the opportunity to back out of a contract but only if they aren’t able to secure a certain amount of financing at terms the buyer finds agreeable.