Desktop Appraisals Becoming the New Normal

[Terrel L. Shields]

For some, they don't worry about it costing more, they shove that fee down the borrower's throat perhaps with a little extra for them. But their fantasy is that a competent appraiser will be doing these quicker is the real laugh. If a person does their due diligence, then this speeds up nothing. Appraiser normally arrange their work in such a way as to maximize their time, yet there is no way to manage misc. work coming in randomly regardless how long it takes. That simply requires enough in the pipeline to avoid redundancy, overlap and efficient research and analysis. And the rush to close is nonsense. If they order the appraisal at the same time as they get the application, the appraisal is probably done by the time they get title work back. If instant satisfaction is the goal, the eliminate the appraiser entirely and make the loan originator responsible. Loan goes bad, the LO goes to jail for six months. The penalty for a bad loan ought to be someone's head roll. Let it be the ones who demand 72 hour turn times.

 

[Tim Hicks (Texas)]

just say no!

 

[Non Sequitur]

just say no!

Good luck with that. It didn't work in the 80s, and it won't work now.

 

[alebrewer]

For some, they don't worry about it costing more, they shove that fee down the borrower's throat perhaps with a little extra for them. But their fantasy is that a competent appraiser will be doing these quicker is the real laugh.

You're exactly right - cost isn't the issue (at least primarily) - it's a pass through fee after all. Time is the key factor - the appraisal fee is nominal in consideration of the overall fees charged by lenders to complete a loan. It's the time they want to cut back, and the groups who have been testing alternative SOW products have clearly demonstrated that there is a significant reduction in time - around 7 days per the conversations I've been privy to. My personal opinion is that there's not going to be a significant difference in delivery times for markets where the typical delivery time is still around 1 week. It's the markets where delivery times are in the 3-6 week time frame that I think the alternative SOW products will have the greatest impact.

 

[CGinMN]

just say no!

How does a salaried employee of Clario (or wherever) just say no?

 

[Terrel L. Shields]

It's the markets where delivery times are in the 3-6 week time frame that I think the alternative SOW products will have the greatest impact.

But isn't the longest turn times in the most rural areas and the most complex properties? I mean how fast can one do a 3,500 SF new construction in a county of 11,000 who hasn't seen a new sale in the last 3 years. Or the underground home- which itself is likely to be out of the city limits. And what about stips? So you do these complex properties only to get demands for closer, more recent and more similar sales. Like underground and berm homes are common. They are so uncommon a friend who built an energy efficient bermed home on level ground, from the specs of an architect specializing in same, 10 years later had the dirt removed and recovered the siding with vinyl because he got sick of seeing a 20% drop in value because it was bermed. And he was a Realtor to boot. Made it less efficient but bingo...added value. WTF?

 

[alebrewer]

But isn't the longest turn times in the most rural areas and the most complex properties? I mean how fast can one do a 3,500 SF new construction in a county of 11,000 who hasn't seen a new sale in the last 3 years. Or the underground home- which itself is likely to be out of the city limits. And what about stips? So you do these complex properties only to get demands for closer, more recent and more similar sales. Like underground and berm homes are common. They are so uncommon a friend who built an energy efficient bermed home on level ground, from the specs of an architect specializing in same, 10 years later had the dirt removed and recovered the siding with vinyl because he got sick of seeing a 20% drop in value because it was bermed. And he was a Realtor to boot. Made it less efficient but bingo...added value. WTF?

So - IRL, how long does it take to develop a report based on the scenario you presented? I'm not talking about the time between accepting the order and actually doing any work, or the time between inspection date and when you finally get around to writing the report - but the ACTUAL time to develop and report the appraisal? For me - even on really challenging jobs, it's gonna be less than 8 hours. I realize everyone's experience will be different, but you're a pretty smart dude, so I'd expect yours would be comparable.

IF, then, as a rural appraiser - you've got 5 assignments that now don't require inspection/driving comps - which I know you know is a HUGE time eater for rural appraisers - how can you not see how that results in a times savings for both the appraiser and the lender?

 

[Terrel L. Shields]

For me - even on really challenging jobs, it's gonna be less than 8 hours.

Wow... I might take several days. Researching the sales can be very time consuming. I have a sale now, I am completely unsatisfied with the info. The reported sales price, the MLS price, and the Zillow price are all different and the acreage shown is different in each case. The deed doesn't tell me. Was it a split? There is land in two states that join. There is no mortgage. So I have a message into a very busy broker and he will get back to me but today? tomorrow? Meanwhile I have another - no agent, no MLS, no one I know knows the buyer and the seller is an LLC. I barely have 3 comps anywhere near the size of the subject and I need all three. I am struggling with those 2 sales right now because an error in the acreage alone could impact my value significantly.

The writing is the least of my problems...maybe 4 hours.

 

[alebrewer]

Wow... I might take several days.

Wow... I hope you're getting paid really well for that.

 

[Terrel L. Shields]

I hope you're getting paid really well for that.

I try... don't you feel guilty when you charge $600 but only worked on it 4 hours?