From the Valuation Review article Know what's expected of you (Part Two)
The successful management of an appraiser’s caseload must have significance in the overall scheme of things. Dwellworks Chief Reviewer Appraiser Bill Rudolph maintains that there is always a fine line between balancing enough work and too much work – this can be a challenge.
An appraiser must know his/her limitations; taking on too much ultimately leads to poor service and quality as appraisers struggle to keep up with demand. The successful appraiser, and one who can maintain a stress-free attitude, is the one who knows how much work they can handle and still maintain quality standards.
It seems like it should be obvious, but appraisers need to know what’s expected. Rudolph mentions several areas that should be on the radar list of all appraisers.
"Multiple USPAP violations, guideline infractions, and failure to adhere to client requirements not only tie up time for everyone but speak to the overall creditability and quality of the appraiser’s work. Additionally, they can expose the appraiser to liability. Many of the reasons reports are rejected for USPAP compliance center around appraisers failing to identify, state, and summarize their findings, rationale, and conclusions in accordance with USPAP. In many states, AMCs are required to send a sampling of all their completed appraisals out for USPAP compliance review. The top three reasons reports fail center around highest and best use, extraordinary assumptions/hypothetical conditions, and reconciliation of the approaches to value. Understanding what USPAP requires can avoid unnecessary correction requests."
Are appraisers up to date on the latest guideline requirements?
"We still see too many appraisals where outdated guidelines are referenced; net/gross adjustments, comps within six months and one mile, etc. Although there may be nothing inherently wrong with this, it begs the question; did the appraiser select the best comparable sales or did they miss the mark by trying to adhere to guidelines that no longer exist? An even bigger concern is how many FHA appraisals fail in review because they don’t satisfy the most basic and current guideline requirements. Someone once said the only constant is change – staying current with guidelines can further reduce the need to revisit one’s appraisals."
"Juggling multiple clients and their many different requirements can be very tedious, and order engagement letters painstakingly long, but cranking out one-size-fits-all appraisals is not the solution. Appraisers should take the time to review the order engagement instruction, not only for each client but for each assignment. Knowing the assignment requirements is one of the first steps in identifying the problem to be solved. Many appraisers use some form of checklist when doing inspections and writing their reports, so incorporating the specific order engagement instructions into this process benefits all.”
It isn’t safe for appraisers to assume their client is aware of every detail when sending an order engagement. According to Rudolph, far too many appraisers expose themselves to problems because they don’t adhere to, or in some cases don’t understand, this element.
“An appraiser should understand his/her client may not have specific details about the subject property when placing the order,” he said. “Clients rely on appraisers to inform them of any unique/complex characteristics or situations that might affect the assignment. Moreover, appraisers should not allow themselves to feel pressured into accepting an assignment they’re not comfortable completing as it will only lead to problems.”
Then there’s the matter of quality control review by AMCs and underwriting by the lender.
“As for the quality control (QC) process, appraisers need to understand their role is part of a larger process and the appraisal report is likely to go through several layers of review during this process,” Rudolph added. “Technology and big data now play a significant role in our industry including the QC process. Your appraisal report will go through the QC process using a combination of technology, data, and human review. An understanding of a few things can reduce the number of times appraisers need to revisit their work.”
Common reasons reports are sent back for correction include: report cloning, missing, incomplete, or illegible attachments such as sketches, maps, and photographs, unsupported conclusions, lacking or conflicting market trends information, and canned statements unrelated to the assignment.
“Appraisers all too often include comments that not only state the obvious but don’t provide the intended users with enough information,” Rudolph said. “We’ll often see statements like, ‘The appraiser selected the best comparable sales…’ or, ‘Adjustments were made for…’ Understanding the requirements found in USPAP Standard 2-2 (a) (viii) can help appraisers avoid unnecessary correction requests.”
"Ultimately, appraisers are depended on to use their expertise to produce a credible and quality appraisal for their client. Having the right approach for each assignment is a win-win for all involved," he said.
Want to learn more about our Mortgage Appraisal Services? Click here!