The pressure does not bother me.
All this talk about pressure... I get pressured all the time, but I press back! Lender pressure is used as a blanket term, but I think we should define the area of that attempted influence.
It's nice to see a home contract for sales. In normal markets, with reliable sets of loan products, contracts can be important factors regarding valuation. Without someone willing to pay more than average, to get into a specific area, thereby driving prices up, how would values increase? Sometimes a buyer in an arms length transaction who is willing to pay more for a home, does affect the homes value slightly. Even if a bank is not willing to lend on these higher, unsupported values (hopefully only a little tiny bit higher), the sale is still posted in the marketplace. Serving as continuing evidence that a certain area maintains strong buyer appeal, and is sought after. When values reach a peak, and the prices of homes in competing developments make more sense to buyers, demand will decrease in the area, and values will climb less.
An example that is easily understandable, but does not happen often, is this one: One home in an area gets a med-small pool installed. pools are not common, and the home is the only one. It's an overimprovement, and is not a good comparable. But is on record as a sale. The neighbor says wow, I have room for a pool. He adds pool. Then another neighbor, and then another builds mini pool, etc. Mabye owners refinance into a pool, so they can have one. Neighborhood values now support homes with pools. Then potential buyers find more appeal in this neighborhood with larger lots & acceptance of pools, creating increased demand, for even average properties without pools. Values increase in multiple value ranges, & sometimes newer, higher value ranges are realized. Buyers contracts serve as strong supporting evidence in that both the deal is arms length, and that demand is increasing, or decreasing.
Predetermined or needed figures relating to refinances is right out!!!! That is obviously where lender pressure is happening. I'd hate to loose out on contract viewing, based on the fact that another appraiser, somewhere else, did not handle business correctly.
Now sales can be susceptible to similar lender pressure. But pressure never forced anything across my desk! If I've made mistakes, that's one thing. But manufacturing value is another. The issue is clouded because so many appraisers do not understand exacting comparable choices, and proper use of highest and best appraisal principals. My valuations are always determined, if possible, by very similar style, size, age, & neighborhood homes (in various orders, based on the problem). It's best to put yourself in buyers shoes, consider the principals of substitution. Then the "comparable choice issue" will be better dealt with. Lenders can pressure appraisers to choose better comparables, but that is ultimately the appraisers decision. The root cause of a lot of those lender pressure issues, are Automatic Valuation Models (AVM's), that claim to be accurate enough for the lender to rely on. Mabye AVM reliability statments should have disclaimers and warning labels, just like medicines...
Additionally, improper, inadequately researched & tested, now known dangers loan packages were available & pushed to the public. This clouded the boundries of "knowledgable buyers & sellers", who were "informed", & making "sound decisions". There is supposed to be a loan oversight committee that approves these loan packages. They requested more financing to research packages, in response to the sub-prime failure. That's one institution where everyone should be turned over, and given a fresh start. Did the big dog originators of the arm loans ever get in trouble? The congressional oversight for one of those banks, ended like a slap on the wrist!
Pressure? Who's pressuring you, let me call them!!!! Don't they know it's a federal crime to pressure an appraiser for value!! I've seen my senior appriaser, Ed Beall in Montrose grow a vein tree out of his forehead, yelling at unethical lenders! I've tried it myself, and it's quite satisfying. You spend time trying to educate people, for the common good, but sometimes they just don't get, or agree with ethics. You've got to run circles around any lender trying to get up on you. With actual appraisal training, it should be no problem. Appraisers, hit the books!
Pressure is in the eye of the beholder. I rarely feel pressured, it's more like I suddenly realize the lender I'm speaking with is a complete moron, and it's time to talk to new clients. But I've already done that, and don't really deal with people like that anymore. They are unfortunante enough to call me randomly sometimes though. I'll try to work with them, but it rarely works out. Talking to some of these lenders is like dealing with used car salesman, seriously.
Lately the daily pressure I recieve is from AMC's trying to get me to sell myself short, pressuring me to take appraisals at under $200. Not paying if they cannot shop the loan sucessfully, even if the appraisal is complete (recent offender: LendersAid, who won't pay my mom for a declining market appraisal they were not able to shop profitably, within 2 weeks). And the issue I am most bitter about, is the bad attitudes & unprofessional work ethics they portray, when you don't play the "how low, can you go?" game with them. There is no middle ground with AMC's, they negotiate with various appraisers, until they get them low enough. They wait a while, then go lower again, and again, and again, and again... Equifax told me they were selling the full $1004 package appraisal for $225 to THEIR client!!! WTF!!!!! Did she just tell me they are selling another persons product at 65% of industry standard costs, then paying the appraiser less than 50% of that figure??? WTF!!!!!!!!!!! (Screaming in streets, hair on fire). WTF!!!!
So now that I did not bow to lender pressures, and struggled financially, I'm being punished for others actions, and have to work for 1/2 of my expected wage? "That don't make no sense!!!!" "A shot in the arm boys, we need a shot in the arm!" "Moral Fiber, and all that".
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