The entire housing market has seen a lot in the past 18 months or so, and the appraisal industry is no exception. With all that’s happened since the COVID-19 pandemic started, we can all safely say that we’ve learned quite a bit.
So, now the question is, what have we learned about the appraisal industry and its future? There’s a lot to think about and consider, and it’s an interesting topic, even though we don’t have all the answers yet. Here are some of the things we’re talking about here at Kairos Appraisal Services.
Local Know-How Is More Important Than Ever Before
As an AMC, one of the most important things we can do to ensure that we always get accurate reports is to make sure that the assignment is going to an appraiser with local know-how, and that’s been truer than ever before in this rapidly shifting housing market.
Appraisers need to know how the local market affects the value of the home. They need to know everything from neighborhood sales to which communities are in development nearby to what businesses are closing. Assigning reports out to qualified appraisers is something we take very seriously, and it has a significant trickle-down effect.
The Market Needs to Be Considered
Appraisers also need to understand the role the local market plays in hot housing markets. A thorough knowledge of the market and how to analyze purchase contracts helps appraisers know how to value homes accordingly, something that’s key to keep appraisals accurate in these fast-moving markets.
Bidding wars, low inventory, and the seller’s market are causing many markets around the country to see a consistent uptick in home values. Conversely, in a few areas, we’re seeing more distress sales (mostly as people move out of higher-cost-of-living areas). Those also need to be carefully considered during the appraisal process.
Different States Have Different Regulations
COVID-19 affected each state somewhat differently, and we saw different regulations roll out for the housing industry and the appraisal industry. We were constantly having to adapt. As the pandemic continues, we will continue to have to be hyper-aware of what’s happening in each state we’re operating in.
It’s a steady progression back to normal, and some things may not ever be exactly the same. As things happen, our job is to stay on top of what’s required in each state and do everything we can to facilitate smooth appraisals. This requires a top-notch team and excellent customer service.
The Appraisal Industry Needs to Adapt
Much like the housing industry, the appraisal industry has had to adapt too, since people don’t want appraisers coming into their homes, and appraisers don’t feel very safe going inside.
There’s long been a desire to speed up the appraisal process, and the pandemic has given the entire industry the push to do just that.
We have an exciting app in the works that will solve many challenges the appraisal industry is currently facing. By allowing homeowners to provide information about the home directly to
the appraiser, we will be able to:
· Ensure an accurate report and an accurate comp for the future
· Ensure the appraiser gets all needed information
· Eliminate many scheduling challenges
· Make the appraisal process quicker by saving travel time
Technology is the key to making appraisals quicker and to making the entire process of getting a mortgage quicker, as well. The appraisal industry’s success will depend on its ability to keep up with technology. The appraisal process must be brought current with technology, and we want to empower the appraisers to be even more efficient while keeping them front and center of the process.
We Need More Appraisers to Join the Industry
Appraisers have been pushed hard for a long time, and many are feeling overloaded and burned out. This is creating longer turn times and a lot of headaches for everyone in the process. This has highlighted more than ever that we need more appraisers to join the industry.
This problem isn’t going to go away anytime soon, either—appraisers are getting older and older. According to these numbers from the Appraisal Institute, 70% of appraisers are over the age of 50!
With the market being so hot and the demand for appraisals being so high, it’s critical that we recruit more appraisers to join the profession as trainees and eventually, as fully licensed appraisers.
Appraisal Waivers Cause Problems
Appraisal waivers could end up being the problem story of the mortgage industry in 2020, and it could continue to cause problems in the future. With fewer comparable sales out there because of fewer appraisals, there’s less data for comps. In a time when the housing market is hot, and we need as much data as possible for accurate appraisal reports.
We believe the future is bright for the appraisal industry, even with the upheaval of the past 18 months, and we’re looking forward to seeing how it all unfolds! What have you learned since the pandemic began? Share it with us in the comments!