SPECIAL SECTION: THE STATE OF APPRAISALS & VALUATION
Appraisals And Social Distancing: A Living Lab Currently appraisers are taking a ‘belt and suspenders approach’ BY RICHARD GARRIE | SPECIAL TO NATIONAL MORTGAGE PROFESSIONAL
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imiting in-person contact is on the minds of everyone, causing the appraisal process to endure unique challenges. Appraisers are considered critical infrastructure employees, lender pipelines are bursting at the seams, yet most homeowners do not want them in the house – likely a prudent stance. A few states have even disallowed appraisers from entering homes. When your own brothers and sisters are banned from visiting, the likelihood of a complete stranger roaming around the house is low. In response, and moving with unprecedented swiftness, the respective governing housing agencies announced appraisal liabilities to minimize the need for interior inspections for appraisals during the crisis. They are allowing information to be gathered from sources that have, historically, not been viable sources for appraisers. These new guidelines and regulations have put alternative valuation products front and center, such as exterior-only (i.e., driveby) or desktop appraisals. Before the pandemic, these products were not often used. Muscle memory has kicked in for all of us – in a “Back to the Future” sort of way. Not surprisingly, most appraisers tend to prefer the exterior drive-by appraisals, as they are also able to get a sense of the neighborhood, which is helpful in determining a home’s value. With their name and reputation on the line, appraisers desire to see it for themselves where possible. I will not bore you with all of the
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maneuvering and adjustment that had to be made, but I will highlight a few of the noteworthy aspects.
SPEED AND FLEXIBILITY Our panel of appraisers has always been the center of our universe. Therefore, it is fitting that I start with them. There is nothing like a national emergency to illustrate what kind of vendor partners you have. The speed and flexibility in which our appraisal panel has adapted to so many overnight changes have been inspiring, as has their professional dedication. As expected, regarding these alternative methods, the two fundamental dimensions everyone wants to know about are turn time and quality. Here at United States Appraisals both dimensions are performing as expected, in line with established service level agreements. These are not new or unfamiliar appraisal products. They have just been less utilized in the recent past. And, regardless of the chosen method to assess value, appraisers simply never waiver on the quality of the result, always willing to vigorously defend their work product. Dusting off and achieving such stability has been a monumental effort, as we contend with barriers not generally in play. For example, some transactions have taken a bit longer due to factors outside of our control, such as limited access to county data, making market analysis more challenging. Fortunately, the 3,000plus counties across the U.S. have made great strides in recent years getting their data online. Appraisers
| NATIONAL MORTGAGE PROFESSIONAL MAGAZINE
Richard Garrie is chief valuation officer for United States Appraisals. His primary role is leading the quality assurance team.
also rely upon multiple listing service information and other third-party data sources to identify the property details.
DEFENDING FOR YEARS Looking ahead, we fully anticipate the potential for added scrutiny and “defending the valuation” on all reviews completed during the pandemic’s temporary guidelines. While we always gather and maintain the necessary documentation on how we derive values, we are currently taking a “belt and suspenders approach,” documenting actions, data sources and overall methodology like never before. We will need to respond confidently and defend our conclusions years into the future, so we maintain a record of all market factors and sources at the time of the report. Rapidly evolving technology is at the heart of our industry and now compulsory in the appraisal and valuation process. When performing due diligence on potential appraisal
