Attention all Realtors, this is very important. Fannie Mae/Freddie Mac, FHFA in their infinite wisdom has advised lenders that they can start using more Desk Top Appraisals starting in March of this year. At first you think great, quicker turn times for appraisals, lower cost reports and they do not have to go inside the home. But WAIT. Guess what? Desk Top Reports require interior WALLS and a Floor plan sketch!
How are the Appraisers going to get that information if they are conducting the Appraisal from their desk you ask? YOU the Realtor will be called upon to do this for them. YEP, it is either you or the homeowner. Now envision this, you or the owner has to have an iphone or Android APP on their phone that allows them to walk around the entire outside of their home (older owners will just love this) and then on the inside, be tech savvy enough to hold the phone and walk through the house and measure the home by moving their phone along all walls or ceilings so the Appraiser can somehow put together a sketch/Floor plan. They have to talk to you or the homeowner about any issues they see as they walk thru the house in detail.
Lenders think Desk Top reports will take Appraisers less time to complete. Guess what it will take LONGER. We have to track down the Realtors or homeowners to set up a time to walk thru the home and do all that is required. Plus you know the homeowner or YOU as the Realtor will want to ask the Appraiser questions as they move thru the home, some they can answer, some they cannot. This process will take much longer as the Appraiser will have to train people every single time they do a report on how to do these measurements. They have to shedule times to do this. Realtors and Homeowners this is NOT YOUR JOB, but this is the reality IF Lenders choose to request Desk Tops from Appraisers.
The Appraiser can walk thru a home, take laser measurements and at the same time note things about the home WAY faster than anyone else can as they have been trained and have been doing this every single day for years. Also Fannie will require Appraisers to use ANSI measurement guidleines as it relates to how to sketch a home. If you have NO clue what ANSI is then get educated now.
So REALTORS, you have the ultimate power with your lenders to bombard them with emails or TEXTS and tell them do not have Appraisers do Desk Top Appraisals. It is crazy that they want a full floor plan with interior walls, when they never required that for full appraisals. The only time we had to do that was if there was an unusual floor plan. So I guess they want to make sure that since we are not seeing the inside of the home they want interior walls on the sketch to make sure the home does not have some sort of unusual floor layout.
Trust me when I tell you this will be very cumbersome upon the person trying to do the measurements and showing the Appraiser every aspect of the rooms inside and outside so the Appraiser can determine if there are any issues in the home or with the floor plan.
Fannie, Freddie and FHFA received NO input from Appraisers who have boots on the ground when they came up with this insane idea. Only YOU can help to squash this requirement in their tracks as they clearly don't want to hear from us!
Also be aware that many Appraisers have already said they will NOT due desk top appraisals! So good luck lenders trying to get this done.
Check out this poll which was just started minutes ago on a National Appraisal Facebook page asking how many Appraisers will or will not complete Desk Top Appraisal reports. Appraisal Poll on Desk Tops
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NAR (National Assoc. of Realtors) posted top 3 Seller concerns. One of them was: "Price Their Home Competitively" “They're telling us that puffing their egos with a fat listing price isn't what they want. They want their property to sell.”
So, I thought "put your money where your mouth is" since I suggested Pre-Listing Appraisals in order for all 3 top seller concerns to be met. Based upon our pre-listing appraisals in 2018, the sellers who placed their homes on the market and listed them CLOSE to our appraised value, the Days On Market for these homes (many of them lakefront) averaged 34 days! The average for similar properties is around 50-60 days. In 36% of the cases they sold in 10 days or less. In only 1 case over 120 days. In some cases the owner got more than their listing price as they priced it very well.
In the cases where the owner decided to list WELL over our appraised value (meaning over 10% of value) not a good story! Longer DOM than typical and price reductions, sometimes several. In many cases they changed REALTORS! Not good! When that 2nd Realtor listed closer to appraised value...Bingo they get the SALE & commission!
So for 2019, consider a Pre-Listing or POST-Listing Appraisal if your home is on the market longer than 60 days. This could be your bullett proof marketing tool to close more deals quickly.
We hope 2019 is one of your best years yet, but in order for that to happen you have to pull a few tricks out of the marketing bag as all indicators are that the market is slowing a bit for 2019 with 2020 the possible start to some major corrections!
As a Realtor you may think great, NO appraisal! No worries..Not so fast!
As a Buyer you may think great no appraisal...that saves me money and that must mean the home I am purchasing is worth what I am paying....Not So Fast!
What is a PIW? (It is a misnomer for one). It means that Fannie has decided the buyer and property are a good risk and waives the Appraisal on the home. They accept the estimate of the home provided by Lender as valid. "A prior appraisal has to be in the Fannie MAE CU (Collateral Underwriter File...for a waiver to be offered)." THIS PRIOR APPRAISAL MAY OR MAY NOT BE ACCEPTABLE FOR A HOST OF REASONS and a prior apraisal should NOT in my opinionhave any bearing on a CURRENT valuation of the property.
So you are a Realtor and you are thinking great I do not have to worry about an appraisal killing my deal. IF you are a Buyer's Realtor you need to have their best interest at heart and not let them over pay or it could come back to haunt you.
In this law suit happy world you need to be very careful. If your buyer gets a PIW on that loan at the very least you need to suggest to the buyer to get their OWN appraisal. Then you need to document your file and let them decide. As part of the recommendation you need to tell them that a PIW does NOT mean the home is CURRENTLY worth what they are paying since they are relying on prior appraisal data and other valuation vehichles other than an appraisal.
The only way a buyer truly knows current value is by getting an appraisal OR taking your word for it based upon your data. Not a wise choice because if later down the road they decide they paid too much and no one told them that they had the choice of getting their OWN appraisal, guess who they will come after first...THE REALTOR.
As a buyer, many may think the lender has decided that their home is worth the sales price. This is NOT true. They are relying on prior data that may be flawed and outside valuation sources and not an actual appraisal.
So while many may be thrilled with the prospect of a PIW. Think twice, protect your buyers and do the right thing! ADVISE your buyers to get their own appraisal and then if they decide NO, you have done your duty to so advise. This should also be the case with CASH buyers!
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