Home Appraisal - Refinancing

[nashville_minnie]

We are in the process of a mortgage refinance & someone is coming by tomorrow to do an appraisal.

Does anyone know about how long the typical appraisal takes & what exactly they need to do to complete it?

 

[msmayor]

Ours took less than 30 minutes.

The appraiser came in and measured rooms, counted bedrooms and baths, determined livable space in the basement (we have 1/2 finished, 1/2 unfinished) and measured the outside of the house to get the "footprint" size.

He was grateful that I had the original builder-supplied floor plan (which I copied for his report) as well as my copy of the property survey when we originally purchased (also copied and gave to him...he said it saved him a trip to the municipal building to look it up).

Very easy.

 

[onyx8]

Ditto PP - it takes less than 30 minutes and they just walk though your house, taking photos of every room and measuring some of them. He/she will do the same around the outside. They also take notes of features (e.g. type of heating system, central A/C, fence).

 

[tvguy]

Wow, 2 refinances, never had anything more than a "drive by" appraisel. Even my original mortgage lender never went in the house.

 

[Buckalew11]

My recent appraisal (not for refi but for Heloc) was longer than these. He said it would take between 45-60 mins but it was at least an hour and 15 mins. He said it wasn't a full appraisal (he had a name like semi-appraisal but not *semi* ??) anyway, I thought it took a long time and wondered what a regular one would be like. He didn't even take photos.

 

[manning]

WE had one that was a joke. We refinanced a year after we bought a newly built house in new development from well known custom builder to take advantage of dropping interest rates. And prices were increasing. He appraised it for less than we paid for it. Found out later bank wanted it that way to refuse loan. The joke was on them. We had over half equity in it that they couldn't refuse.

 

[bicker]

I think a lot of it has to do with how conscientious your mortgage broker is. There is a very strong movement now in banking for more accountability and greater assurance, and that of course requires greater rigor in assessing the value of collateral.

 

[Sanchez]

I think a lot of it has to do with how conscientious your mortgage broker is. There is a very strong movement now in banking for more accountability and greater assurance, and that of course requires greater rigor in assessing the value of collateral.

With new regulations in place mortgage brokers have little or no control. It used to be that loan originators had the ability to choose an appraiser and of course that resulted in selections of appraisers who would get the number they needed. It was not uncommon for mortgage brokers and real estate agents to pressure appraisers.

Now, it is essentially a blind draw. Requests are sent from banks to appraisers on the respective approval lists and the appraiser can accept or reject the assignment. The problem with this is that lenders are essentially bidding for the lowest fee (sometimes as low as $175 in our area) and new or less qualified appraisers are accepting the assignments. An experienced, well established appraiser is unlikely to work for those fees. Also, with the new system you are likely to get an apprasier who is unfamiliar with your area.

 

[bicker]

I haven't heard anything about that being the case here. As far as I know, federal law imposes a voluminous set of standards (182 pages worth, my quick googling tells me). As it is, by the same token, that system is likely to prompt a lot more convergence with regard to appraisals. It wouldn't make sense for the gentleman to have spent the half hour building the case file for our refi appraisal unless he was getting something out of doing more than just driving by and putting a number down on a card. So the question is really a matter of the accreditation system. That could very well be driving all appraisals toward a single, well-defined standard of practice. That would surely be a good thing, especially for the banks and their investors.

UPDATED:

Lenders can hire independent appraisers, use an in-house appraiser, or work with an appraisal management company, which often subcontracts with independent appraisers.

The Center for Public Integrity

Keep in mind that the issue isn't whether or not the current system may tend to unfairly undervalue homes - it indeed may. The issue was whether or not the current system may tend to overvalue homes - and my read of the situation, backed-up by some quick checking to see what's changed since the last time I dug into this, is that that is not the case. The process is still very much biased in the banks' favor, and the context of that has changed from overvaluation being advantageous to now undervaluation being advantageous.