Let’s Get Back To Real Appraising!
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Let’s Get Back to Real Appraising:
We have all encountered the glass is half full / half empty perspective. This perspective could be applied to everything life throws at us. The appraisal industry is no different. We are hearing a lot of doom and gloom over Fannie Mae’s Property Inspection Waivers (PIW) and Freddie Mac’s Automated Collateral Evaluation Program (ACE). On the surface the glass appears half empty. Well, the glass is definitely half full; maybe even 3/4 full.
We can now get back to real appraising…….
No more UAD, No more 1004mc, No more scope creep, No more false parameters, No more Collateral Underwriter, No more ridiculous revision requests, No more upload fees, No more AMCs! Let’s encourage Fannie and Freddie to waive appraisals on all loans! In fact, let’s encourage FHA to join them!
Real Estate is the largest purchase consumers will ever make. A home inspection is a cheap insurance policy to assure the purchaser of any issues. An appraisal is cheap insurance to validate the value of the property. Agents never let a buyer waive a home inspection nor should they ever let a buyer purchase a home without an appraisal. It all boils down to liability. A buyer’s agent is obligated to represent their client’s interest. If a home is purchased for more than its fair market value and the agent did not advise against it, the agent is liable to their client. This liability automatically extends to the broker. How many agents are willing to take on that liability? How many brokers are willing to take on the liability of their agents?
The appraiser is now the agent and broker’s best friend. Agents and brokers will gladly encourage buyers to get an appraisal to shift that liability from them. It may be prudent for brokers and agents to pay for an appraisal themselves even if their client is reluctant. What about the sellers and their agents? Are they immune from legal action if they sell a property above market value? If a customer who spills hot coffee on themselves can be awarded millions of dollars from McDonald’s, anything is possible.
It’s all about the liability!
This is our opportunity to take back our industry, re-establish our relationships with agents and brokers, and establish our fees based on our skills, experience and professionalism. In other words: our worth. Let’s start the conversation with brokers and agents and get back to real appraising.
Thank you Fannie and Freddie for giving us the opportunity to take back our industry!