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Help the Bank Appraiser to Avoid Valuation Issues!

By C. J. Coury

In today’s changing mortgage lending landscape the bank appraisal process has been totally redesigned. Lenders are no longer able to question, coach, prod or pressure the real estate appraiser in any way. In fact, loan origination associates are prohibited from even speaking with the appraisers. Although the reason for these new restrictions is sound they do create the need for a new way of approaching this component of the mortgage approval process for the REALTOR®.

When contacted to set up the inspection appointment a listing agent should be prepared to provide a list of comparables to the appraiser with detailed, factual information as needed. If the best available comps are bank foreclosures you can’t expect the appraiser to ignore them as they represent the current market in which the lender would be competing should they need to re-sell the subject property. However, you can assist them in arriving at an accurate condition adjustment. Let me give you an example to illustrate this point.

In my community there were two foreclosed properties, both of which sold this year. One had been abused by the former owner and ignored by the lender, the other was well cared for and kept in move-in condition while on the market. Not surprisingly there was a $150,000 spread between the selling price of the two properties due to their respective conditions. Now, let’s assume that another property within the community sold within a few months of these two homes closing. The appraiser would view them both as viable comps but would not be aware of the significant difference in their condition unless the listing agent for the abused property returned their call and provided them with the details. What do you think that the odds are of that happening? Do you want to trust the outcome of your sale to the wiles of this individual

What can you do? Prepare a list of comps for the appraiser to consider making certain that they are near the subject, have sold within the last 3 – 6 months, are as similar in location and size as possible. Now be sure that you provide your valuable insight as to the condition of any of these comparables that you feel significantly impacted their selling price. While this will not guarantee that the appraisers evaluation will meet the contract price it will certainly increase the probability of that happening

Provide a comp package to the bank appraiser and you will experience less frustration due to low evaluationsC. J. Coury is a Senior Vice President with Bank of America and oversees their residential mortgage division serving Sarasota, Manatee and Charlotte Counties. Prior to joining Bank of America in 1995, C. J. was President of Mortgage Brokers of America in Birmingham, MI for 7 years. He has been an active mortgage finance professional since 1983. C. J. may be reached at (941) 952-2888 or by email at charles.j.coury@bankofamerica.com. http://mortgage.bankofamerica.com/charlesjcoury