In today’s, post mortgage apocalypse, market one would assume that the most important part of an appraisal is the accuracy of the estimate of value. By virtue of the data being utilized, its uniformity in how it is presented, the crackdown on form-filling number pushing appraisers, and all the tools we have at our disposal, estimates of value should be more and more accurate every day.
Contrary to this, in the last couple of months, I have noticed a shift from conditioning reports for items such as additional comparables, more explanation, or additional reconciliation to litany of items that have no impact on the estimate, the property itself, etc. The core purpose of an appraisal is the estimate of value or so I thought. Some of the most recent appraisals my office has completed have been countered with numerous revision requests for items such as but not limited to: add license number and indicated value of cover page, add lead paint certificate, or comment as to whether the subject is or is not an over improvement. Some other items include canned commentary being requested that the appraiser add comments similar to: the appraiser has completed X amount of appraisal in the subject county, the appraiser that completed this report confirms that they have adequate competency to complete appraisal assignments in the subject’s market area. These are recent revision requests, none of which is indicated by the client in their engagement as a requirement and often the client is unsure what exactly they need. The items are simply returned because someone along the line said so.
Underwriters and review appraisers should concentrate more on the important parts of the appraisal such as subject description, comparable selection, accuracy of data, etc. Some AMC’s and Lenders have QC in which a Quality Control Analyst will go through a check-list and condition you one by one. “Please provide photo of crawl space and comment that crawl was inspected” while if you look in the improvement section you would see “slab” checked off. The market seems to have lost sight, once again, of the true goal here. To put together a good solid appraisal product in order that a client may make a reasonable decision and loan on the property. We are all on the same page with the same goal in mind. However, somewhere it has turned into a we/they situation attempting to put a square peg in a round hole. The fact is that they don’t all ‘fit’. We all need to take a moment step back from the deal we are working on and ask ourselves does it make sense? The appraiser asking this would add commentary and lessen the need for revisions. Lenders and underwriters doing this would lessen the amount of un-necessary requests and lower loan to close times often by days or more.
In conclusion, with all the recent changes to conformity, a set of revamped forms that work better in this sort of regulated system are necessary. There are large amounts of data and sections that are either redundant or no longer used in many instances. The MC form for instance is a stand-alone form that needs to be incorporated into the marketing section of the standard URAR. Currently appraisers are spending far too much time on data entry, and correcting minor errors which should not be holding up a loan. New forms with the rules of UAD conformity would seemingly help bring everyone into the next generation of appraising!