Please Help Us Avoid Homelessness!

[Meandering]

That's true but we are real estate experts, while techbiker is within the General Public, so, the terminology differences may the antagonizer, in this discussion, which might help in the understanding to show that even though the terms are different the process is still pretty much the same.

 

[TRESinc]

not really marion. techbiker wants the borrower to have the ability to choose the appraiser and thinks there is little to no competition between lenders.

 

[techbiker]

^^^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.

Ms. Neuenhaus,

-Of course the lender has to conclude foreclosure proceedings to hold the asset. I thought that was a logical inference from my statement "when the buyer defaults"? The borrower/owner/buyer cannot simply refuse to pay their mortgage payments and only incur an additional lien. That makes no sense. You are correct Mr. Rhodes!, the deed of trust seems to be used commonly in Texas. My apologies for my inconsistent terminology.

-Get over it and stop trying to stir the pot. I wasn't even comparing appraisers to hairdressers.

-You just admitted the appraisal isn't strictly for the lender. It has a great potential to impact the borrower's decision-making process "you negotiate it out with the seller or bring in more funds to protect the lender's position or you don't close.". Seems like a good reason to ensure the appraisal arrives as soon as possible.

TRES,

-It is true I only have a year and a half experience in commercial real estate. From my 8 years of experience in economics, I am making the argument that appropriate incentives exist for the buyer to assume a larger role in the lender's appraisal process. The buyer has the incentive to complete the appraisal early and contain the cost of the appraisal since he or she is usually highly invested in the purchase. Traditional lenders are often so large each borrower is only a statistic. Would Bank of America lose sleep if their appraisal for your $300k home purchase came in 3 days before closing and $50k below contract? Doubt it. You'd usually have to pony up $50k, convince the seller to drop the contract price $50k, extend the option period, or some combination in 3 days. The lender could always request a copy of the seller's appraisal and receive 2 great data points if the buyer commissioned.

-TRES, the onus is on you to explain why it would be a disaster for the borrower to commission the appraisal (or at least be more involved in the process). At this point, I'm wondering if you have skin in the game?

 

[Meandering]

not really marion. techbiker wants the borrower to have the ability to choose the appraiser and thinks there is little to no competition between lenders.

With interest rates this low, there is no margin for competition for borrowers between lenders, except for shorting closing fees to venders.

But borrowers should not chose appraisers. Borrowers can chose lenders and can inquire how the appraiser will be chosen and how the appraiser will be compensated, and what appraisal management fees are being charged in relation to what appraisers are being paid.

.

 

[TRESinc]

TRES,

-It is true I only have a year and a half experience in commercial real estate. From my 8 years of experience in economics, I am making the argument that appropriate incentives exist for the buyer to assume a larger role in the lender's appraisal process. The buyer has the incentive to complete the appraisal early and contain the cost of the appraisal since he or she is usually highly invested in the purchase. Traditional lenders are often so large each borrower is only a statistic. Would Bank of America lose sleep if their appraisal for your $300k home purchase came in 3 days before closing and $50k below contract? Doubt it. You'd usually have to pony up $50k, convince the seller to drop the contract price $50k, extend the option period, or some combination in 3 days. The lender could always request a copy of the seller's appraisal and receive 2 great data points if the buyer commissioned.

that's why the borrower has the ability, and power, to shop around. my longest running client orders the appraisal the day the loan application is taken. not all lenders are the same as i have said time and time again.

and fyi, other then sharing the words "real estate" commercial has nothing to do with residential.

TRES, the onus is on you to explain why it would be a disaster for the borrower to commission the appraisal (or at least be more involved in the process). At this point, I'm wondering if you have skin in the game?

no, it is not. you are an un-educated (with regard to this topic) member of the general public who doesn't like something they have no admitted knowledge about yet thinks things should be different based on your perceived feelings and misconceptions. it's not on my to prove anything. i have decades of history and common sense on my side. i find it amazing you can't see the basic flaw in your wants.

the lender is the one giving out money so they order the appraisal. period.

 

[Howard Klahr]

the onus is on you to explain why it would be a disaster for the borrower to commission the appraisal

Look into the 1987-1993 real estate decline that gave rise the Resolution Trust Corporation, numerous bank failures and legislation implementing appraiser licensing. many loans prior to this period were obtained with borrower obtained appraisals. Hence federal lending regulations were established to prohibit borrower obtained appraisals for lending purposes.

the lender is the one giving out money so they order the appraisal. period.

I believe the principle being stated here is that the one with the gold makes the rules

 

[JasonHaskell]

As I've stated on other threads, I appraise in Oregon and am bidding new work for December 7th as of this evening. I've been no less than 6 weeks out for new work for over a year and not less than 8 weeks in at least 6 months. I'm seeing rush fee's in the multiple thousands of dollars for the time frames the original poster is looking for. I personally don't even have any open slots, even Sundays to fit in their order. Earliest I could get to something even on a rush basis would be end of October. It is very frustrating with how long we are needing to hear that the AMC's are piddling around for weeks before even placing the order. That's not helping anything! Not sure that this helps the OP any, but I just wanted to confirm the reality of the situation on the ground in Oregon and Washington right now.

 

[leasedfee]

I believe the buyer should have the privilege of ordering the appraisal, as long as they work with a reputable appraiser!

That was an unmitigated disaster, a la Savings & Loans Crisis. Buyers/developers/sellers/loan officers shopped sycophant appraisers, and the tales of fraud and incompetence would fill a book. Texas, I hear, was especially bad. A number of appraisers went to prison. . . .

An appraisal is a government sanctioned document. An appraisal is predominately for use by government, e.g., courts, IRS, eminent domain authorities, and guarantee of our banking system (FDIC). Anyone can crunch numbers, but they are not granted the recognition to speak authoritatively to the government about real property value. {I've long felt that ordering of appraisals should be taken out of the hands of the lenders altogether.} . . . . . You or I could set up a tripod and measure-off a detailed map be it in crayon or autocad of a parcel of land. But not being a licensed surveyor, it would not be a "survey" -- just a nifty map.

 

[Eli]

That was an unmitigated disaster, a la Savings & Loans Crisis. Buyers/developers/sellers/loan officers shopped sycophant appraisers, and the tales of fraud and incompetence would fill a book. Texas, I hear, was especially bad. A number of appraisers went to prison. . . .

An appraisal is a government sanctioned document. An appraisal is predominately for use by government, e.g., courts, IRS, eminent domain authorities, and guarantee of our banking system (FDIC). Anyone can crunch numbers, but they are not granted the recognition to speak authoritatively to the government about real property value. {I've long felt that ordering of appraisals should be taken out of the hands of the lenders altogether.} . . . . . You or I could set up a tripod and measure-off a detailed map be it in crayon or autocad of a parcel of land. But not being a licensed surveyor, it would not be a "survey" -- just a nifty map.

That is like bias here and bias there when comparing who orders the appraisal and trying to see who has more bias.

I wonder if the original poster knows what her or his appraisal fee is yet and who is paying it?

 

[Eli]

Of course I don't know the answer to remove bias from the ordering system. I think it might be a government agency ordering based on all the factors.

It was different when all loans were kept in house. The stockholders of a bank were more of a balancing act then.

The stockholders wanted to protect their investment and wanted the best appraiser they could find. We see that didn't work either because that was not always the case.