I wanted to touch on appraisals. In the past couple of years, appraisal costs, and timelines, have gone up. Part of that is the amount of demand for appraisers, and the lack of appraisers working in #PDX metro area. It is true..becoming an appraiser is not an easy thing to do, so a lot of people are not interested in going into that field.
So, supply and demand, means appraisal costs have shot up. When I started, the cost of an appraisal was about $425. Now, some companies are charging close to $900 for an appraisal. I think it was due time for that service cost to go up, but it can be a painful hit to someones savings.
Fannie Mae and Freddie Mac have both seen this, and have come out with a few ways to reduce those costs. One of those ways is with a PIW (property inspection waiver) for Fannie Mae, and ACE (automated collateral evaluation). These two systems take into account the down payment amount, credit score, if a person has reserves, etc., to determine if they even need an appraisal. Of course, the system has to know that the value is reasonable, so it uses it's own system of valuing a home. If the system agrees with the value, than there is no appraisal needed.
Here is how it works. Client submits an application with me, with an identified property address, and I run it through either of their automated underwriting systems. The system analyzes everything, and lets me know if an appraisal is needed.
I wanted to get across to people that a lot of the time, we are seeing appraisal waivers. This saves time, and money, for my client. It really is a great thing.
There are also tricks to getting the system to know the correct property address. I know those tricks..and some lenders don't. So, another lender may require an appraisal, and I won't. You have to know the system, to know how to use the system correctly. Nothing shady here, just know how it works in detail.