How do you feel when an appraisal revision request pops up in your inbox in the morning? Frustrating, right? You already painstakingly checked your appraisal report the previous night before hitting ‘send’ and now you’re on your screen the next day, making revisions to the same report under a tight deadline!
As an appraiser, your time is valuable, and post-delivery requests are time-consuming. Once you submit an appraisal report, you probably don’t want to see it again. It diminishes productivity and slows down your work, and it can be such a headache.
Luckily, we have seven fool-proof ways to reduce revision requests for appraisal orders. In this blog, we will explain the impact of appraisal revisions, methods to prevent common errors, and tips for ultimately reducing the occurrence of appraisal corrections.
What are the impacts of appraisal revision requests?
One of the critical impacts of multiple revision requests is turn time.
At Clear Capital, we have found that pre-customer delivery requests add an average of 2.0 days to the report turnaround time, while post-customer delivery can add an average of 5.6 days. Frequent revision requests can affect an appraiser’s ability to receive future assignments from most appraisal management companies (AMCs) and lenders. Mitigating repeated requests improves productivity and efficiency, which results in the ability to complete more orders, generating more profit!
In addition, the time it takes to obtain an appraisal report can significantly impact borrowers. Buying or refinancing a house is stressful for home buyers, and “being able to rely on a timely valuation can make a big difference,” says Heather Khan, Senior Analyst of Quality Assurance at Clear Capital. Delays in responding to revision requests can have a serious impact on all lending parties during the review process.
In a volatile market where interest rates are constantly changing, an appraised value can sometimes trigger a renegotiation. When this happens, buyers have to build it into the process to avoid deal expirations. Meeting appraisal commitments, delivery dates and quickly addressing revision requests improves the overall home-buying experience.
How to prevent appraisal revision requests
To cut down on appraisal revision requests, it is important to keep these best practices in mind:
- Communicate in a timely manner
- Address the request thoroughly and professionally. Add additional commentary where appropriate.
- Ask questions. If you disagree with the request for appraisal submissions or have concerns or need clarification, please reach out for clarification.
In addition to adopting best practices, Ken Folven, Senior Director, Appraisal Quality Assurance at Clear Capital, says appraisers play a critical role in maintaining public trust in the real estate lending and home-buying process.
“We need to demonstrate support for the value and reliability of the appraisal analysis to promote trust and credibility,” he said.
With Folven’s advice top of mind, here are seven tips for reducing appraisal revision requests that top-performing appraisers swear by:
1. Explain ‘How’, not ‘Why’ in the appraisal report
The most common frustrations arise when the appraiser focuses more on the type of adjustments made while the reader would look for the ‘how’ in the appraisal report. For example, if a positive or negative adjustment was applied in the report, the reader wants to know how the adjustment was determined.
“How did you determine that the subject comparable was inferior or superior in condition? Don’t leave the ‘how’ part out while applying adjustments. Be sure to address those questions; it will certainly help you in the long run.” says Folven.
2. Reduce lengthy commentary
In some cases, appraisers provide lengthy boilerplate commentary in an attempt to avoid a revision request. This strategy often backfires because parties involved in the lending process cannot find the specific information they are looking for in the report. Inconsistent commentary can result in common requests for revision.
Prior to submission, read the letter of engagement in detail, which highlights the customer-specific information, and make sure to include all required information in your report. Organize your commentary and explain your comparable selection process briefly.
“I always recommend organizing commentary by adjustment rather than by comparable and make it a habit to review the pre-delivery rules,” says Khan.
Derek Mitchell, a California-based Senior Appraiser at Clear Capital, has a different approach.
“I use a lot of characteristic-based comments as opposed to comparable-based comments because it cuts down on the amount of writing that I have to do and the amount of reading the reviewer has to do,” Mitchell says. “It tends to get redundant when you’re just talking about different comparables but the same characteristics.”
In addition, staying up-to-date with Uniform Standards of Professional Appraisal Practice (USPAP), Federal Housing Administration (FHA), and GSE guidelines and industry requirements also goes a long way in drafting error-free reports that would otherwise create unnecessary revision requests.
3. Use technology and templates to organize and save time
There are a lot of handy tools that can help appraisers save time and stay organized. Mobile applications like CubiCasa streamline field appraisals by standardizing the data collection process and digitizing the property information for an appraisal report.
For example, with CubiCasa an appraiser can scan a complex property in roughly five minutes using a mobile device. The app then generates an ANSI-aligned Gross Living Area (GLA) floor plan with measurements, which can integrate into a report.
Additionally, applications like Totalmobile allow an appraiser to develop and personalize templates for loan products and types of appraisals, including conventional, FHA, etc. Cloning an appraisal report can end up taking more time and create the potential for revision requests than well-developed templates.
4. Do careful pre-inspection research
Take your time doing your pre-inspection homework! Underwriters review online listings, subject property photos, and comparable sales to see if the assigned ratings and adjustments make sense. Any evidence of inconsistency or inaccuracy will likely result in a revision request.
Be thorough in your analysis. Proactively describe external influences and any inconsistencies a client may identify when searching online data sources.
5. Eliminate surprises
Before submitting an appraisal report, validate your findings by double-checking with third-party agencies such as the city for zoning requirements and special assessments. Even driving around the neighborhood or viewing it online to look for adverse influences on the property value is another great approach.
6. Communicate issues ahead of time
Lenders and borrowers have expectations and deadlines to meet. Therefore, it is important to maintain open communication on the issues and processes which may affect the appraisal report.
In order to mitigate the risk for the lenders, it is important to communicate the appraisal process to the parties involved in the lending process and explain the participants’ preferences in a given market. Bracketing the feature in a property is another great way to identify the characteristics that may contribute to the property’s value in a market.
7. Run a quick check before sending
Finally, always review appraisal work before submission. Surprisingly, this last small step can drastically cut down on revision requests.
Go through your report page-by-page and ensure the sketches/floor plans, maps, and photos are uploaded. Eliminate grammatical and spelling errors by running a complete check on the content, and make sure to address the page prompts.
Use these effective strategies to prepare an error-free, perfectly crafted, well-supported, and professional-looking appraisal report!
Elevate the appraisal process with Clear Capital
To discover more methods for reducing revision requests, watch the informative webinar series, An Appraisers Guide to Quality Appraisals. With tips for eliminating appraisal corrections that top-performing appraisers swear by, watch it free and on demand!
Clear Capital is a real estate technology and appraisal services company that strives to empower best-in-class appraisers with cutting-edge technology. As our valued partners, we are committed to helping appraisers deliver high-quality reports with fast turn times and increasing overall appraisal efficiency.
To learn more about working with us and joining the independent appraisal network with heart, visit our appraiser careers page.