The government stepped in a couple years ago to try to improve the appraisal process. The government felt that consumers needed protection from appraisers and agents conspiring to manipulate appraisal prices so that deals could be completed.
The governments solution was the creation of a middle-man company that takes orders and sends the appraisal requests to its member appraisers. The new middlemen now takes about 1/2 of the total cost of the total service as a coordinating fee and then sends the requests to member appraisers.
What was seen as a shake-out of bad appraisers has resulted in our best and most experienced appraisers leaving the business altogether. They were forced to join middlemen companies and could no longer procure business from their past customer base. Every appraiser was now given an even playing field. It didn't matter how experienced or inexperienced you were, as long as you met basic guidelines and signed up to receive assignments, you had to get in line to get business. Your past client base and priceless experience meant nothing.
What we are now left with is a market busy with re-finance, turn-times excruciatingly long, and increased prices. We continue to see that appraisals are often incomplete with errors. Required corrections are put to the back-burner because the appraiser isn't making money. Prices continue to go up, service to go down, and innacurate information becoming common.
Government intension was good but in reality this mis-guided new regulation is now wreaking havoc in an already complicated process. In a new poll of National Association of Realtors members, 33% of all Realtors report problems with appraisals.
Our hope is that the middle-man is done away with and we can go back to streamlined process where the most knowledgeable appraisers will want to come back to this business. We need them badly.
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