Lenders are under a lot of pressure to meet deadlines more than ever due to mandatory requirements to make disclosures to consumers and pending expiration dates for a lock on a specific interest rate around which an entire deal is structured. Meeting deadlines is critical in today’s environment. What can you do, as a lender, to help facilitate making the appraisal process go more smoothly and minimize or avoid potential delays? If you have been in our business long enough, you know that experiencing delays in the appraisal process is inevitable on occasion: A borrower will not be as available to provide access to a property for an inspection as quickly as everyone assumed, or everyone is waiting on a copy of the fully executed sales contract. Things of this nature can stall the process and can add a day or two to the turnaround time. However, other situations cause delays and with a little advance planning prior to placing an order for an appraisal, it is possible to avoid some issues that result in things coming to an abrupt halt.
Below are some suggestions on how to help an appraiser up front and avoid potential delays in working on a report because the appraiser is waiting on information:
- Inspection Appointments. Provide as many ways to reach the property contact as possible; home phone number, work phone number, cell phone number, e-mail address, etc.
- Prepare Property Contact. Inform property contact that the appraiser will be calling to schedule and will need to schedule as quickly as possible.
- Purchase Transactions. Make sure to have the fully executed copy of the sales contract to provide the appraiser. USPAP requires an appraiser make every effort to review the fully executed contract (signed by all parties mutually agreeing and committing to the terms outlined) prior to completing an appraisal report. Some appraisers will refuse to move forward without being provided a copy. Making sure you have it uploaded and ready for them can avoid the delay in the appraiser waiting on documents.
- New Construction and/or Proposed Renovations and Additions. Providing the full plans and specifications when the order is placed can help avoid delays.
- Features and Condition of the Subject Property. Get your customers to provide you with a list of recent improvements and upgrades. No one knows the property and neighborhood better than the owner!
– Ask them to provide a list of all the special features, such as a remodeled kitchen or new roof. Recent improvements or upgrades are not always readily apparent. An appraiser will be making a list of features but unless advised, they may not realize something is nearly new or recently done. Most property owners are glad to brag about their property’s features, so have them provide a summary of what has been done in the last few years.
– Also ask them if they are aware of any homes nearby that have recently been listed or sold and share the information with the appraiser. There are times when sales do not show up on a local MLS system or other data sources.
- Market Information. If you are aware that a subject property is in a high-demand area where there is few homes for-sale, resulting in back up contracts or offers; this is valuable information. Back up offers and backup contract data and the details are not listed in local MLS data. Such market dynamics may or may not be readily apparent to an appraiser in their on-line research databases. By providing such information to us at the time the order is placed up front, you can help the appraiser short-cut their research time and time spent trying to reach real estate agents for information (who are sometimes reluctant to provide it until there is a problem.)
- Income producing Properties. Where properties are leased for longer than a one year term or where multiple leases are in place (usually commercial properties,) make sure you have uploaded a full copy of the lease agreement(s) and a rent roll for the immediate previous 12-month period.To keep appraisal turnaround times to the minimum these quick and easy suggestions will help eliminate possible delays. Have all information available to the appraiser up front so there is no delay that could have been easily avoided. Test them out and give these suggestions a try today!