Why Hire Appraisal Report Writers Now Rather Than Later
According to a couple of appraisers we talked to recently, the increase in requests for appraisals seems to stem from several things: the two Federal rate cuts in March and the updated rules for documenting properties. Let’s see how these developments can affect your appraisal report writing and why outsourcing the research and report writing process helps you complete property evaluation assignments faster.
#1 Federal Rate Cuts
A Reuters article reported that “the first cut of a half percentage point was on March 3 and the second of a full point was on March 15, which brought the Fed’s overnight borrowing rate for banks back to near zero.”
For consumers looking to get a bank loan approved right now, that’s great news! It’s meant to provide short-term borrowers easy access to credit during a crisis. This is especially a great option for reverse mortgage borrowers — people who own their property, but plan to use it as collateral for a loan.
The elderly may take advantage of this scheme for their retirement plan through a home equity conversion mortgage (HECM). However, if your client is thinking of getting a loan in preparation for a lockdown or to secure credit access in case of a major healthcare crisis in their family, then a reverse mortgage can help.
If you’re an appraiser, then these Federal Reserve cuts might be working in your favor. Many homeowners and other property owners would be interested in getting their properties appraised. A real estate investment may seem a good idea now, while interest rates are very low (almost down to zero).
#2 Updated rules for entering properties
Did you know that, in some states, the property owner can now submit their own photos and videos of their property, instead of the appraiser coming to their property to measure and document everything?
The Federal Housing Administration (FHA) has relaxed the rules concerning property appraisals in late March 2020. The announcement came via a Mortgagee Letter, which was meant to address concerns about the COVID-19 pandemic.
A news report on the Reverse Mortgage Daily explains the new rule:
“Appraisals for properties on most new traditional forward mortgages and Home Equity Conversion Mortgages (HECMs) can now be conducted through either exterior-only inspections or through desktop-only appraisals in an effort to minimize contact and potential transmission of the virus between people, allowing for appraisals to still take place while observing social distancing guidelines and other COVID-19 mitigation efforts as recommended by the Centers for Disease Control and Prevention (CDC).”– Chris Clow, Reverse Mortgage Daily (March 29, 2020)
The new appraisal rules are designed to “limit face-to-face contact for certain transactions.” They are effective immediately for appraisal inspections completed on or before May 17, 2020. However, the letter also clarifies that these policy updates will not be incorporated into the HUD Single-Family Housing Policy Handbook 4000.1.
Nevertheless, it’s as good a time as any to encourage property developers and homeowners to either buy a new property or sell one. The ease in completing a property inspection helps in speeding up the property valuation process.
What do all these changes mean to your appraisal report business?
It might become hectic for real estate professionals this time, especially appraisers. Many people are looking for cash infusions and some may be looking to either buy or sell properties in the shortest time possible.
Hiring a team of appraisal report writers will speed up the process. You can cut down the time it takes to complete the property research from the subject to comparables. Plus, outsourcing that job will help you manage your resources and fill up the gaps in work load and assignment completion. You can, practically, multiply the number of reports you can produces in a week by three-fold (if you started with three agents), but you can easily scale the production up to meet customer demands.