- Miller Samuel Real Estate Appraisers & Consultants - https://www.millersamuel.com -

Good Appraisers, If Speed Is Only What You Need

Here’s something you might have heard at some point:

“That appraisal firm is really good.”

Ok, that compliment means different things to different people. I am going to try to rank them by what I perceive to be the majority thinking on it. Although my rankings may be biased or completely wrong, the concepts are not:

  1. Speed — This is the number one priority of many consumers of appraisal services. The appraisal is often the last item to be completed on a mortgage approval. It can make or break the deal if it is done too slowly. The proliferation of appraisal management companies, who essentially are only able to rate appraisers by their turnaround time, have created a legion of form-fillers, who can’t afford, nor do they have time, to do a credible job.

  2. Cost – Keeping appraisal costs low, is perceived as a way to make the lender or mortgage broker more competitive. Of course, the assessment of collateral of a $1M mortgage can be decided by a $100 difference in fee and a world of difference in quality. Actual payment of fees to the appraiser are often used as leverage for making the number. If the fees are require in advance, less leverage is available. In the current environment, the appraiser has been relegated to a form-filler and the process is really seen as a “have to do” with little relevance to the overall objective, hence downward pressure on fees continues.

  3. Service – Overlaps speed and cost. Making appointments with sensitivity, handling the applicants professionally, client has easy access to appropriate appraisal staff to get the report turned around in a reasonable period of time. Moral flexibility (aka having business savvy) is very important. Being able to reach out to the appraiser or their superior to negotiate the value is key.

  4. Miscellaneous. Anything can be inserted here. You name it.

  5. Miscellaneous. Anything can be inserted here. You name it.

  6. Miscellaneous. Anything can be inserted here. You name it.

  7. Miscellaneous. Anything can be inserted here. You name it.

  8. Miscellaneous. Anything can be inserted here. You name it.

  9. Miscellaneous. Anything can be inserted here. You name it.

  10. Competence in a specific market – This is a distant placement in the rankings because the person who typically orders an appraisal for mortgage purposes has a financial incentive to get a desired result in a predetermined time frame. Clients rarely ask an appraiser what their experience is in a specific market because the perception is that the process is formulaic and its simply a matter of gathering data, inserting it into a form and the result is automatically determined.

A wise appraiser I know once told me:

Everyone in a sales transaction knows the value before the appraiser does. The buyer, seller, listing agent, selling agent, seller’s attorney, buyers attorney, bank, bank’s attorney, mortgage broker, and title company already know the value. The appraiser is simply late to the party.

Here’s a sample of appraisal firms who market themselves as fast. No real discussion of quality/competance other than brochure-speak.

Good grief.