With mortgage rates rising and loan volumes likely to decline as a result, it’s more important than ever to find ways to lower your cost per loan and squeeze out inefficiencies across the mortgage and home equity loan process. To help you in the appraisal department, we’ve come up with 10 tips to save money on your real estate appraisals.
- Order appraisals early in the loan process to avoid rush charges and delays in loan closing; especially in rural footprints and specific states that are experiencing appraiser shortages (for example – the states of CO, OR, TX, and WA).
- Set realistic closing date expectations based on multiple variables – for example, closings in OR and WA utilize a 30-day Purchase Agreement but the turn-time for appraisals in these states is currently at 45 days.
- Obtain proactive turnaround time information from your appraisal supplier so you understand what turn-time to expect in all your markets over the next quarter. Ask your supplier to update this information quarterly.
- Work with your supplier on establishing clear review guidelines to reduce turn-time, revisions and additional costs.
- Use an appraisal supplier with assignment logic that incorporates appraiser performance as well as appraiser distance to the subject property – appraisers that are closer to the subject property reduce travel time which helps reduce cost.
- Review your engagement letters and eliminate over-burdensome and unnecessary appraisal requirements – time equals money – the more time an appraiser needs to allocate to an assignment, the greater the cost.
- Use an Alternative Appraisal product for Home Equity or Default when applicable.
- Implement an Alternative Interior Appraisal product in lieu of a FNMA 1004 where appropriate.
- Deploy a valuation cascade to use the most compliant and cost effective product for each lending scenario.
- Get involved to protect the future – the appraiser shortage is here and already driving up appraisal costs in certain states – be part of the solution by asserting your voice in the regulation process. You have the opportunity to influence everything from apprentice programs to speeding up and streamlining the licensing process.
Need help in implementing these? Contact Accurate Group to get started, and you’ll be seeing lower appraisal costs and faster loan turn times before you know it!
Appraisal Tip of the Month (“TIP”) is a publication of Accurate Group, LLC and is intended to provide current insights to recipients. Tip should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only. You should not act or refrain from acting based upon any information in this TIP without seeking the appropriate legal or other professional advice on the particular facts of your situation. Accurate Group, LLC makes no warranty of any kind with respect to the subject matter included herein or the completeness or accuracy of this publication.
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