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Home Appraisal

Buying a Home? Questions You Should Ask About the Appraisal Process!

July 10, 2010

When you’re getting a Houston TX Mortgage you will find that you will also need an appraisal. Pretty much any loan program whether you’re purchasing or refinancing requires it. Since this is the normal course of doing business many people don’t ask about this requirement, but they SHOULD!

Over a year ago Fannie Mae and Freddie Mac required lenders to order the appraisal through an independent process that is separate from any interested party. What this means for most lenders is they end up going through a Third Party Vendor who hires an appraiser based on a certain set of requirements. This all sounds good in theory but in practice it’s been bad for the consumer.

Where these requirements fall short is with the Third Party Vendor. They typically hire appraiser for less than half of the actual appraisal fee and expect the appraiser to give 100% of their time and energy on the appraisal. Most of the seasoned and highly experienced appraisers can’t afford to take on the same work for half the pay so the Third Party Vendors usually hire new and inexperienced appraisers for the job. Sometimes the appraisers are hired for a job in an area they have no knowledge of. These issues typically culminate into poor appraisals and values that are not consistent or correct for the home being appraised.

When the appraisal is challenged for value or any other issues the lender must navigate a large bureaucratic system with lots of red tape that can cause a buyer to lose the home of their dreams.

So what should a person getting a Houston Mortgage ask about the appraisal process? First, does the lender you’re thinking of using order their appraisal through a Third Party Vendor or do they order it through an internal group that is independent as required by the Home Valuation Code of Conduct (aka HVCC)? If the lender uses a Third Party Vendor, ask if your full appraisal cost is being given to the appraiser and if it isn’t, how much is given to the appraiser? Remember, you usually get what you pay for! Since most lenders use a Third Party Vendor you will not know where the appraiser is coming from to do the appraisal on the home your wanting to purchase and you will not have the opportunity to know the experience of the appraiser.

If the lender is providing you with a Houston Mortgage uses an internal group that is HVCC compliant you should ask about their appraisers’ knowledge of the area and experience. The lender should have no problem with providing you this information and the credentials of each of the appraisers. Just understand the lender doing your Houston TX Mortgage will not have the ability to pick the actual appraiser who will be appraising your future home.

As a Houston TX Mortgage Lender, we order our appraisals through an internal group that is independent as required by HVCC. Our appraisers are geographically assigned based on their typical service area and receive 100% of the appraisal fee you pay. All of our appraisers have worked with us for years and we are comfortable with any of them completing your appraisal.

If your shopping around and don’t hear an answer that resembles ours, you should keep shopping! Appraisal fees are typically over $400.00 and when you add up other fees you typically have during the purchase process such as inspections, earnest money, credit report, etc… you could be sourly disappointed right before you were SUPPOSED to close. Not to mention… lighter in the wallet.

Brad Notter is part of the Brad and Denise Team at http://houstontxmortgagelender.com/ providing Free Expert analysis of you’re home loan finance needs. We have many Free Online Workshops to help you Sell or Buy YOUR next Home. You can attend one of our many workshops at http://houstontxmortgagelender.com/free-online-workshops/

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