The primary way lenders establish the value of a home, either for a purchase transaction or a refinance, is through a Residential Appraisal Report.
In recent years, the structure of regulation relating to appraisals has changed dramatically, creating some improvement in the process of ordering appraisals, but also some frustrations for lenders and consumers. It used to be that each lender would have their favorite appraisers who they would use and trust as market experts and be price-competitive. The introduction of new regulations now creates more of a clearing house approach where lenders must order from appraisal management firms who randomly assign the appraisal, and that has created a new layer of costs and higher appraisal fees for the consumer.
Appraisals are a mandatory function of lending, so adaptation as borrowers and lenders is crucial. Appraisal turnaround times are slower in a busy market, so plan accordingly. Order the report and book the appointment quickly with your appraisers; make sure the house is ready, with the mandatory smoke and CO2 detectors installed and the water heater is strapped to code.
The more you do to make it easier on the appraiser, the better the valuation and turnaround time.
Jayson Stebbins is a 23-year veteran of the mortgage banking industry. He grew up in Morgan Hill and currently lives in Gilroy. He is the local branch manager of Guild Mortgage. You can reach Jayson and his team at (408) 825-0220 or atwww.stebbinsmortgageteam.com