The dreaded two words home buyers hate to hear from a lender: “Review Appraisal”.
What this means is that the lender wants their own real estate appraiser to give a second opinion as far as the worth of the collateral (the home being purchased).
I am in the process of purchasing a beautiful home. Part of the process entalils a loan and as a condition of the loan an appraisal is furnished by the borrower (me).
My appraiser did a normal home appraisal. Not expecting any problems.
But those dreaded words came from my lender. “We’ve ordered a review appraisal”. Some lenders have the audacity to have the prospective borrower pay for this additional expense. In my case, the lender (First Franklin) is notorious for ordering reviews, but they cover the cost.
In some cases, it’s cause for concern. The reason that “reviews” can be unnerving is that sometimes borrowers are attempting to arrange a mortgage for the full amount of value of a property. What if lets say a property is appraised for $100,000 and the homeowners are attempting to borrow $115,000. There may be some problems especially if a loan officer is too eager and starts to make unrealistic promises.
Loan officers are notorious for asking their appraisers to “push” or “stretch” real estate values. Pushing or stretching property values is bad business. The reason why is that it creates situations where the lender must have a second informed opinion, thus…the review appraisal.
I have found that “pushing” value is a losing game. My appraiser is a hard worker. He spent hours making sure he had found the best comparable properties within the closest proximity to the property which I am purchasing. This process is required in order to determine a value which is substaniated by previous comparable sales.
Herein lies the reasoning behind working with dedicated professionals. What sets quality appraisers apart from average ones is the time they are willing to spend in determining value. Greedy appraisers only want to do fast work and get paid.
Dedicated professional appraisers take time to make a solid effort to find comparable sale properties which will withstand underwriting scrutiny and bring a true high market value.
Most quality loan officers have the best qualified and most professional appraisers working with them.
Doing business with professional loan officers and appraisers will pay a dividend. What clients receive are the best program offerings combined with top notch appraisals.
Update: Hooray! My review appraisal came in and it supports the value which we were looking for.