The Appraisal Process ... Chances to Learn More, Share, and Be Happy When the Stars All Align This last week, I attended my local Three Rivers' Association of Realtors (Serving Will and Grundy Counties) Learning Lunch. I was very impressed by the great turnout. I believe the topic being highlighted at this luncheon greatly influenced members' decision to attend ... as it was a topic that touches upon all of us within our industry frequently. The topic in question??  Appraisals! Three Rivers had arranged for 3 local, independent Appraisal firms (one of which is on my Chicago Bancorp "approved Appraiser" list) to be on-hand and provide presentations regarding the current market, the challenges presented by the lack of sales, and the "type" of sales occurring and needing to be appraised. One Appraiser addressed the recent changes to the Appraisal report itself. He talked of the "exactness" that is required in certain categories where adjustments are made. He drove home the point that Realtors can help Appraisers greatly by providing detailed information within their listings. How does that more detailed information help the Appraiser? It was pointed out that it most certainly assists from an accuracy standpoint ... but it also greatly improves the ability of the Appraiser to provide a more timely turnaround on the completed Appraisal too. The second Appraiser discussed the need to satisfy mortgage lenders' Underwriters with detailed and accurate reporting ... sometimes with as many as 6, 7, or 8 Comparables being utilized within an Appraisal report. All the Appraisers on-hand for the Learning Luncheon agreed that 4 Closed Sales and 2 Active Listings were the starting point for most of their Appraisals. When asked if they avoided using "Short Sales" or foreclosures as Comparables, to a person they said, "no one wants to have to use "distress" sales, but name a housing market that is "free" of them? This is especially true when needing to use Comparables that SOLD in the last 6 months, were in the same neighborhood or marketplace, and were similar to the Subject Property." Many of the Realtors in attendance wanted to know the "magic formula" that Appraisers use to "adjust" for all the above factors? Unfortunately, the reply was, "There is none". Again, all 3 Appraisers stated that only adjustments for true differences in the properties were being allowed. Condition of the Comparables, if inferior or superior to the Subject Property, could be considered and adjusted for. But there should NOT be expectations that a Comparable that was sold as a Short Sale or Foreclosure should ... or would ... get a "bump up" in value because of the terms of that Sale ... ESPECIALLY if there were no "traditional" market sales to be found.  Of much interest to those in attendance, was the discussion of the new Appraisal Requirements recently enacted. Discussion regarding those ratings of C1 to C6 (Best to Worst), and Quality of Construction Ratings, also from Q1 to Q6 (Highest to Lowest), with specific definitions for these ratings from 1 to 6, raising many questions for clarification. All of the Appraisers indicated that the time involved in completing an Appraisal had doubled or tripled in the last few years. They noted that the ability to satisfy a Mortgage Lender or Underwriter has become increasingly difficult in recent times. Someone wondered aloud, "Why is that"? A variety of answers were provided by the Appraising viewpoint, but I (as a Mortgage Lender) believe the real answer is: that Appraisals, which are the support for the Value Estimate arrived at, and the "completeness" and "accuracy" of the Appraisal Report, remain the biggest hurdle for a Loan Originator and Underwriter to get past when a loan file gets SOLD in the secondary market. You simply must have a logical, defensible, and solid Appraisal Report to satisfy Quality Controls of End Lenders ... Fannie Mae, Freddie Mac, and independent loan servicers. The end result of the Appraisal itself must be that the Buyer pays a fair price for their home. But the Mortgage Lender must retain the right to know the "true market value" of the property being purchased or lent upon. And thirdly, the "Agencies" themselves need to know that the value was arrived at without any undue pressures or influences. These days that happens when the stars are all aligned ... a truly beautiful thing to behold when it occurs. The Three Rivers Association of Realtors is to be commended for hosting this important and timely topic for discussion and education at this month's Learning Lunch. The more everyone involved within our industry knows and understands of each other's contributions to the process of buying, selling, and financing homes, the better. It makes the entire transaction flow much more smoothly and easily toward successful conclusion. And ultimately is what we all want ...  * Looking for an experienced Mortgage Lender within the Will and Grundy County Area? Or a Referral Partner that has the expertise, knowledge, and wide program of services to satisfy and successfully close the transactions of your clients? I have over 35 years of mortgage lending, appraising, and financial planning service and expertise that will accomplish that and more. Contact me today ... I'll love hearing from you and also cherish the opportunity to earn your trust and mortgage business. I can be contacted through any of the following means: Direct: 815.277.4036 Cell/Text: 708.921.6331 Email: gene@chicagobancorp.com Website: www.genemundt.com Skype: 630.219.1316 Click Here 4 a: NO Cost NO Obligation Mortgage Consultation Available via Your Mobile Phone/Devices Now! |
 |
||||||||||||||
 
CategoriesActiveRain.comAgents and Brokers Announcements and News Appraisal changes Appraisals Arbor Day ARM Loans Asking credit and mortgage questions Asset-Based Lending Program Baby Boomers Bolingbrook, IL budgeting budgets Businesses Buying a Home Buying or Renting Calendar of Chicagoland Events Cash Purchases Charitable Causes Charitable/Community Organizations Charity/Charity Events Chicago Chicagoland Chicagoland Activities Chicagoland Entertainment Chicagoland Markets & Special Events Chicagoland new construction Children Choosing a Mortgage Lender Choosing Your Real Estate Professionals Clients Closing Costs Commercial Lending Commercial Loans and Properties Commercial Properties Communication Community Info Community Services Condominium Associations Condos and Townhomes Conducting Business Construction Costs Cook County Co-Signing Mortgages Cost of Living and Bills County Services and Departments Credit Credit and Financial Counseling Credit Counseling Credit Repair Credit Reports/Fico Scores Crest Hill, IL Debt Deciding Which Home is Best to Buy Discounts Doing Business Down Payment Downsizing a Home DuPage County DuPage Township Education Education Opportunities Educational Opportunities energy saving initiatives Families Family Activities Family Issues Fannie Mae Fannie Mae/Freddie Mac FHA Approval for Mortgage Lending FHA Financing for Condominiums FHA Mortgage Insurance FHA Mortgage Lending Financial Glossary and Terminology Financial Planning Financing First-Time HomeBuyers Frankfort IL Freddie Mac Fun, Comical Gene Mundt Gene Mundt's Client Services Golf/golf courses Grundy County Halloween HARP 2.0 Helpful Hints History/Historical Sites Holiday Events Holiday Shopping Holidays Home Buyers home buying Home Improvements and Curb Appeal Home Inspections Home Maintenance & Repair Home Ownership Home Services Home Staging Homemaking Homeowner Affordability and Stability Plan Update, 2011 HomePath Program HUD Identity Theft and Crime Illinois Importance of Credit Insurance and Insurance Services Interest Rate Lock-In Interest Rates Investment Properties Investors and Investments Joliet/Shorewood Kane County LaGrange, IL Lake County Lincoln-Way Community High School District Links Localism Posts Lockport, IL Lombard, IL Los Angeles CA agents and realtors Los Angeles Home Buying Los Angeles rental properties Maintenance and Upkeep of Your Home Manhattan, IL Marketing McHenry County Military Personnel and Veterans Military Personnel and Veterans Mortgage Programs and Discounts MLS Service Mokena, IL Moms Monee, IL Money-saving Strategies MoonDancer Realty, Dillsboro NC Mortgage & Transaction Processing Mortgage Banker Mortgage Closing Costs Mortgage Costs Mortgage Crisis Mortgage Lender Mortgage Seminars Mortgages Naperville New Leaf credit-improvement program New Lenox, IL North Carolina Real Estate/R.E. Agents Obtaining Mortgage Quotes, Pre-Approvals, & Info Palos Verde Realtor/Brokers Palos Verde, CA Parents/Relatives Assisting with Down Payment/Home Buying Park District Activities Plainfield, IL Preparing your home for sale Pre-Qualification/Pre-Approval Pricing a home for Sale Private Mortgage Insurance Professional Service Property Assessments Property Tax Bills Real Estate Real Estate Advice Real Estate Attorney Services Real Estate Contracts Real Estate Professionals realtor magazines and social media Realtors Recycling Refereral Partners Referrals Refinance Remodeling Rental Properties Rental Properties and Investments Right Time to Buy a Home River Forest, IL Romeoville, IL Safety Sales Tales Savings Advice School Districts Schools Seeking Advice Sellers Assisting with Closing Costs Selling Your Home Senior Issues Senior Issues/Reverse Mortgages Servicing Clients and Referral Partners Shopping Shorewood, IL Short Sales/Foreclosures Social Media Special Events St. Charles, IL Staging your Home Tax Deferral Programs Technology The Federal Savings Bank Three Rivers Association of Realtors - Will and Grundy Counties Travel utility bills VA/Military Veterans Video & Audio Village and Police Services Will County Will County Activities Will County IL Tax Bills/Assessments Will County Services Winnetka and North Shore Winter Activities women Working with a Mortgage Professional Working with a Real Estate Professional Zoning and Building Classifications |
|
 |
||||||||||||
    |
||||||||||||||
