BLOG VIEW: Most mortgage professionals are acutely aware that the lending industry is currently struggling with appraisal delays due to a shortage of qualified appraisers in some market areas. This challenge has resulted in forward-thinking appraisal management companies (AMCs) developing solutions that make the most of available resources to expedite the appraisal process through hybrid products that combine elements of a subject field inspection and a restricted desktop appraisal.
For certain conditions, restricted desktop valuations can offer a lower-cost alternative service when compared with traditional, full appraisals. They also offer faster turn time solutions. A traditional appraisal in challenging states can take a week or more, whereas the average turn time for a restricted desktop appraisal is less than five business days.
Lenders also want the confidence of knowing that a subject property is in a marketable condition. In order to accommodate this need, we have combined the restricted desktop appraisal with a subject field inspection by a real estate professional. When you marry the two services together, the lender receives a best-of-breed product that provides the convenience and quick turn time with the additional accuracy of a visual confirmation of subject condition.
The hybrid valuation product is the result of a joint effort between real estate agents and appraisers effectively working together while, at the same time, independently focusing on their particular contribution to the product. Here’s how it works: When a valuation assignment is received, the AMC then delivers the assignment to its panel of real estate agents, who provide the interior and/or exterior site inspection and current subject photos, thus leaving the comparable analysis and local market analysis for the appraiser to research. The real estate agent will not include a value or conclusion on the report. Once the necessary data is reflected in the report, the agent submits the information to the AMC, which then delivers the report to an in-house, state-certified appraiser, who reviews and analyzes the report and may use additional data to then procure a final, value conclusion.
It is important to note that there is absolutely no value sharing between the real estate agent and the appraiser. The appraiser simply uses the data aggregated by the real estate agent to establish a final value.
By utilizing both real estate agents and appraisers, the industry speeds up the appraisal process, which results in an overall faster lending process. In states such as Colorado, Washington and Oregon, there is a severe shortage of appraisers. And the licensed appraisers who are working are heavily overworked, each with a backlog of assignments. By adding real estate agents to the mix, lenders are not limited to an ever-shrinking appraiser pool.
Lenders now have options available to expedite the appraisal process. This hybrid product may just be the solution to end their frustrations.
Audrey Clearwater is vice president of operations at LRES, offering valuations, real estate owned asset management, homeowners association and technology solutions for the mortgage and real estate industries.