One thing we’ve been talking about a lot this year is the fact that homeowners to lenders to buyers want to get a mortgage more quickly. It seems reasonable, too, given all of the advances in technology within the housing industry recently to utilize appraisal technology—especially during 2020.
The Pandemic Has Changed Appraisals
The housing industry has been changed forever by the pandemic. Not to mention the technology that cropped up overnight allowing people to continue to buy and sell homes even with state restrictions. The innovation we’ve seen has been, well, downright inspiring.
Appraisers haven’t wanted to put themselves or their families in danger, and borrowers have different preferences about exposure, as well. This coincided with huge refinance volume.
In order to continue doing appraisals during the pandemic, more appraisal waivers than ever were issued. The continuation of appraisals was especially important because the pandemic really slowed down the process of getting an appraisal. In fact, appraisals were slow even before the pandemic due to high demand and limited appraisers available.
The Problem with Appraisal Waivers
There’s been talk about different ways to deal with appraisals slowing down the mortgage process, especially during a pandemic. Of course, appraisal waivers are appealing because they make the loan process much faster, as do desktop appraisals. However, they prevent us from having anyone get an accurate picture of the value of a home by verifying its current condition.
As we all know, there are a lot of regulations around appraisals to make sure they are as accurate as possible. Accurate appraisals are key for protecting lenders and buyers. They are also key for ensuring that there is enough good information to base future appraisals on.
Innovation is Happening Now
We think there are better ways to speed up the process and get accurate appraisals than appraisal waivers. In fact, the pandemic has been a catalyst to create alternative methods to form opinions of value. This flexibility has allowed us to work wonders for the future of the appraisal industry.
Some lenders are allowing appraisers to use third-party data from the agent or the borrower to complete appraisals. With this flexibility, appraisers can use videos, photos, and other data that the homeowner has provided.
We believe this is a way to achieve the best of both worlds— to utilize better technology to improve turn times AND also make sure appraisals are highly accurate.
This would mean allowing homeowners to have a hand in the appraisal process. This would help speed it up while still allowing for the appraiser to review the home as it is at the time of the transaction.
With the appraiser being able to direct a virtual appraisal, they can have more confidence that the report is accurate. They have current data and information to analyze. If appraisers need more information, they can also ask the homeowner (or get it themselves).
Today’s Tech-Savvy Consumers Have High Expectations
And there’s some buzz that homeowners would welcome using technology to be more involved in the appraisal process. Although homeowners are satisfied with the appraisal process, there’s an indication that they’re going to demand more. It would also be more convenient to provide information to an appraiser virtually rather than coming into your home.
One reason for this interest is the difficulty of scheduling an inspection and then having to wait for the appraiser to arrive. Some homeowners also prefer virtual inspections because they believe they are faster than a traditional inspection.
The way appraisal appointments are scheduled is starting to change, as well. Many are still scheduled via a phone call, but email and text scheduling is growing. Respondents find those to be easier methods for setting appointments. In the future, perhaps respondents could do this all via an app.
We’re excited that consumers are pushing for more efficient ways to get an appraisal done. It’s something that many people in the real estate, mortgage, and appraisal industries want, as well.
We think there are many ways to improve the entire process of getting an appraisal. At Kairos Appraisal Services, we’re at the forefront of developing and pushing this technology and also working hard to get it approved.