For years, the appraisal process was simply that the lender contacted an appraiser to appraise the home.  After recently legislation, the lender now contacts a management company who collects a fee (sometimes ½ of the entire fee) for scheduling an appointment.  Appraisers are currently receiving less money after the management company’s cut.  This new system has resulted in sloppy appraisals being completed by inexperienced appraisers; appraisal problems are becoming more common.

When completing the appraisal, appraisers compare the subject property to at least three similar sold comparables (comps).  I have a buyer in escrow in La Crescenta; a big draw to the community is the excellent schools.  The genius appraiser used a comp in the neighboring community of Tujunga (part of LA Unified School District).  When the lender reviewed the appraisal there was a problem due to the overall poor quality. 



What happens in this instance?  I asked for a copy of the appraisal and typed a letter to the lender.  Having approved loans while I was in the mortgage industry, I know my way around an appraisal.  I made comments for each comparable selected by the appraiser and then included a list of more suitable comparables (all within the same school district).  The lender then submitted my letter to the management company who forwarded to the appraiser.  The appraiser corrected the appraisal and after this two week delay we are back on track. 

Whose fault is this?  I believe the new appraisal law was poorly written and not thought out.  Consumers are paying more and appraisers receiving less.

Under the current law, how can appraisal problems by avoided?  It is the Listing Agents (seller' s agent) job to supply the appraiser with comps and to take a few minutes to discuss them with the appraiser.   Had the listing agent (who shall remain nameless) done her job, escrow may not have been delayed two weeks.  This would have been one less fire for me to extinguish.