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[techbiker]

now you are comparing hairdressers to appraisers? thanks for the insult. intended or not you just compared someone who flips burgers at mcdonalds to the chef at a 5 star restaurant - the required knowledge and training between the two are not on the same level by a long shot.

there are a multitude of factors that could have happened to cause the delay for your commercial appraisal. once again i'll say it - the appraisal was not performed for your benefit nor were you the client, so it did not, and should not have, impacted your decision. you had already agreed to the purchase price prior to making the loan application let alone the appraisal being ordered by the client (the party actually lending the cash to make the purchase). every appraisal in the world states it's purpose and i would bet a considerable sum that the appraisal you received did not state the intended use was to aide the borrower in making a decision about purchasing the property.

let me know when you achieve a decrease in regulation. it hasn't happened in the 20+ years i have been doing this. even if by some miracle you or anyone else could achieve this it still wouldn't change the fact that appraisals are order by, and on behalf of, the party who is lending the funds and not the party who is borrowing them. you may have offered a higher fee for the one-time appraisal you wanted for your transaction but the appraiser will make far more money from the client in the long run as they consistently order appraisals. you are not looking at the bigger picture.

No comparison intended. I was going to bring up Obamacare exchanges as an example of an inefficient system with some precedent, but did not want to offend. I am a libertarian and pin most of society's woes on government overreach. I have the utmost respect for appraisers and all they do.

The lenders should pay the cost for their appraisals then, or at least split them 50/50. Something tells me the lenders' appraisals really just serve as a fee for the buyer that is regulated by the government. It's just very unusual there is no competition between lenders on the appraisal process. We would have shopped interest rates as well as loan process flexibility if it had been an option!

 

[TRESinc]

The lenders should pay the cost for their appraisals then, or at least split them 50/50. Something tells me the lenders' appraisals really just serve as a fee for the buyer that is regulated by the government. It's just very unusual there is no competition between lenders on the appraisal process. We would have shopped interest rates as well as loan process flexibility if it had been an option!

the appraisal is part of the application process and application fee. if you don't like it you can always pay cash, but if you want to borrower you will pay the fees. it's no different than buying a car, a major appliance or a tv - shop around and see where you get the best deal.

of course there is competition between lenders, that's why every application fee is not the same. the lender i just refi'd through only charged $295 to me. the flip side is that i have a slightly higher interest rate but that rate was still lower than the advertised rate of some other local lenders with application fees in the 4 figure range. borrowers need to perform their due diligence before committing to something.

 

[techbiker]

of course there is competition between lenders, that's why every application fee is not the same. the lender i just refi'd through only charged $295 to me. the flip side is that i have a slightly higher interest rate but that rate was still lower than the advertised rate of some other local lenders with application fees in the 4 figure range. borrowers need to perform their due diligence before committing to something.

I'm afraid competition between lenders is severely diminished due to government interference and regulation (Dodd-Frank, etc.). The lending process for a purchase has become very obscure and convoluted. With a refi you have the privilege of time. In a seller's market, the buyer often just doesn't have weeks to spend negotiating deals with various lenders. Often a day or two make the difference between landing a deal and missing the boat.

The idea behind government regulation often is to protect everyone from their own mistakes. The unfortunate reality is it just makes things worse.

 

[TRESinc]

I'm afraid competition between lenders is severely diminished due to government interference and regulation (Dodd-Frank, etc.). The lending process for a purchase has become very obscure and convoluted. With a refi you have the privilege of time. In a seller's market, the buyer often just doesn't have weeks to spend negotiating deals with various lenders. Often a day or two make the difference between landing a deal and missing the boat.

The idea behind government regulation often is to protect everyone from their own mistakes. The unfortunate reality is it just makes things worse.

no, it isn't. all lenders are subject to the same rules and regulations. where the competition comes in are the fees they charge and the speed at which they move. not every car dealer sells a new car for the same price just as not every lender charges the same for a loan. the process is not obscure or convoluted unless the buyer does not take the time to perform their due diligence and research all their options. it never ceases to amaze me how little effort people put in to certain aspect of buying a property.

again, buyers should put the effort out to ensure they can do what they want to. i agree that a typical buyer does not have weeks to get loan approval. that's why there are pre-approval processes. if one wants to buy a property the first step should be to get approval for a loan. searching for a property let alone putting in an offer should never happen until one is assured someone will loan them the funds to do so. many agents in my market won't even schedule a showing without a pre-approval letter.

 

[Peter LeQuire]

To be clear...it had already been pushed back to the 12th. But just yesterday we learned it would be 8/31. What bothered us is not that appraisers are busy, but that are lender somehow was unaware of how long it would take and waited until so late to tell us. But now it all makes sense as they'll just incrementally increase the price until someone picks it up.

Just a thought - as long as your loan has been on some status or another with this lender, it would be prudent to be all over the person processing your loan (or whoever your contact is) to be sure that all (repeat, all) of the documents necessary for loan approval are in order. Documents like credit reports, income and asset verification, source of closing funds and all the rest must be kept current. When lenders are busy, they spend a lot of time "putting out fires" with loans that are close to their closing dates and are not completely processed, and you need to make sure that closing isn't delayed because of a processing oversight.

I don't know how you push a lender to push to find an appraiser. The appraisal management company model doesn't accommodate exceptions or critical personal circumstances of the buyers and sellers it ought to be serving. Perhaps you can find a person with the lender you've applied to who can troubleshoot/expedite your loan procession.

Remember - for many of the players in the mortgage business, your loan is just fodder for some investment instrument: these folks often appear to have a difficult time understanding that their paperwork is holding hostages the lives and families of the people who are trusting them for their best efforts.

 

[techbiker]

no, it isn't. all lenders are subject to the same rules and regulations. where the competition comes in are the fees they charge and the speed at which they move. not every car dealer sells a new car for the same price just as not every lender charges the same for a loan. the process is not obscure or convoluted unless the buyer does not take the time to perform their due diligence and research all their options. it never ceases to amaze me how little effort people put in to certain aspect of buying a property.

Keep telling yourself that bud! In your perfect lending world, there wouldn't be any need for loan sharks, hard money, pawn shops, and all of the other easier "alternative sources". Heavy-handed rules and regulations create barriers to entry at the very least. Only the large, established traditional players are typically protected in our system. Remember how many of the large institutions were considered "too big to fail" in 2008?

Pre-approval is no guarantee. In all of the traditional lending cases I've seen, the lender reserves the right to back out until the very last minute before closing.

What we really need it seems is a dramatic roll-back of overbearing financial regulations. Let's get everyone competing in a truly free market again.

 

[TRESinc]

Keep telling yourself that bud! In your perfect lending world, there wouldn't be any need for loan sharks, hard money, pawn shops, and all of the other easier "alternative sources". Heavy-handed rules and regulations create barriers to entry at the very least. Only the large, established traditional players are typically protected in our system. Remember how many of the large institutions were considered "too big to fail" in 2008?

Pre-approval is no guarantee. In all of the traditional lending cases I've seen, the lender reserves the right to back out until the very last minute before closing.

What we really need it seems is a dramatic roll-back of overbearing financial regulations. Let's get everyone competing in a truly free market again.

keep grinding your axe about things you don't know or understand....

My real estate experience is limited to my search for a new medical clinic site for my father's orthopedic practice.

 

[Denita Neuenhaus]

I'm only asking legitimate questions and positing possible solutions. We're all stuck with licensed and regulated hair dressing. There is virtually no reason for licensure of hair dressers aside from it serving as a barrier to market entry. Precedent doesn't make something reasonable or logical.

Our appraisal came just 3 days before closing and served little purpose in our decision making process. It made no sense for us to double pay for our own appraisal. If we had commissioned the appraisal, it would have happened much sooner and the appraiser would have made more money.

When a buyer defaults, the lender still holds the asset (at least that is my understanding!). Additionally, lenders often hold many of the buyer's other assets as collateral. The lender shouldn't see much risk unless the original appraiser assigned too much value to the property (seemingly not likely to happen from a buyer's appraisal given his/her incentives).

If there was less regulation in the lending market, I'd bet we'd see more flexible appraisal options. I believe that government overregulation has caused many of these inefficiencies.

I appreciate all of your info!

^^^Your comment I put in bold above is a complete misunderstanding of the process.
The lender does not in any way "hold the asset". The lender places a mortgage lien on the asset and has to go through the foreclosure process to take back the collateral when a buyer/borrower default. You have the deed. You own the property when you close. If you sell, you have to pay off the liens, including any mortgage liens, on the property before you deliver clear title. This is completely the opposite of your supposition above.

As to the appraisal being part of your decision to purchase - that is specifically not the function of an appraisal. You made your decision when you made an offer on the property. Presumably, you had comparable sales to formulate your offer and continued to reference the sales as negotiations on the subject property progressed. The appraisal is strictly for the lender. You pay for it and have a copy of it but you don't own it as you aren't the client. You can bet your bottom dollar that if the appraised value came in lower than the sales price your LTV would be based on the appraised value and not the sales price - either you negotiate it out with the seller or bring in more funds to protect the lender's position or you don't close.

BTW, I too am offended by your analogy of hairdresser to an appraiser and I'm not an appraiser.

 

[Meandering]

keep grinding your axe about things you don't know or understand....

^^^Your comment I put in bold above is a complete misunderstanding of the process.
The lender does not in any way "hold the asset"..

Deed of trust is more commonly used in some states.

This may just be a regional difference that is causing this communication misunderstanding.

Deed of trust:
a deed of trust or trust deed is a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender. The equitable title remains with the borrower. The borrower is referred to as the trustor, while the lender is referred to as the beneficiary.


.

 

[Denita Neuenhaus]

Deed of trust is more commonly used in some states.

This may just be a regional difference that is causing this communication misunderstanding.

Deed of trust:
a deed of trust or trust deed is a deed wherein legal title in real property is transferred to a trustee, which holds it as security for a loan (debt) between a borrower and lender. The equitable title remains with the borrower. The borrower is referred to as the trustor, while the lender is referred to as the beneficiary.


.

It is true that deed of trust is used in different regions, but the underlying principal remains the same: the lender has to go through the foreclosure process to obtain the pledged collateral. The lender doesn't own the property; as you pointed out, the equitable title remains with the borrower. The borrower is the one that can sell, finance or otherwise encumber the property. The lender can only begin the foreclosure process in the case of borrower default (even in those Western States where the deed of trust is most commonly used).