Are you paying unseen add-on fees for your appraisal?By Ken Harney, nationally syndicated real estate writer
Excerpt: Are you getting fleeced on appraisal charges when you buy a house or refinance? Could you be paying as much as double what the appraiser is receiving for actually doing the work, with the excess going to an undisclosed third party?
My comment: of course, we worry about residential being next. But, Fannie and investors don’t really care about the deminimus. They still order appraisals. I remember when FIRREA passed in 1989 with the $250,000 deminimus and we thought residential lender appraising would be in big trouble. But, Fannie et al still required appraisals. However, there are no standard investor requirements for lender commercial loans, so it will have a much bigger effect. In many areas, including my area, commercial lender fees are still way down from prior to 2008.
The other way appraisers needlessly generate comparable warnings occurs when they misrepresent the subject. CU is actually very trusting. It believes what you tell it about the subject and so the sales it presents will be selected and ranked to match your representation of the subject.
Consensus C3 properties will be ranked high by CU; all the C2 and C4 properties will be ranked low. If the actual condition of your property is most consistent with C4, and you bring in competitive C4
properties, those will be low rank sales. Warnings will be generated because it looks like you’re overlooking more comparable properties.
By Isaac Peck, Editor
I studied science in college. My afternoons were filled with labs. When I graduated, I was ready to start working in labs with little additional training needed, if any. I was surprised that none of my appraiser education had any “lab” time. Appraiser training has always varied widely, depending on who you worked for as a trainee. But, banks trained most appraisers so there was some consistency. I was trained at an assessor’s office, with training by supervisory appraisers and classes. When banks laid off their staff appraisers and fee appraisers took over training about 20 years ago, it has been a hopeless mess.