Often sellers may get an appraisal done prior to listing their home for sale which may come in
higher than what a lender ‘s appraisal does.
WHY DO YOU ASK?
Private appraisals do not have to meet any lending guidelines, unless the person contracting for the appraisal knows to request a report that would meet “Secondary Market Guidelines . If they don’t make this request, for the most part they receive what is commonly referred to as a “Vanity Appraisal. The appraiser will get a feel for what the property owner (or whomever is contracting for the private appraisal) feels the property is worth and keep that in mind when completing the report.
Secondary Market appraisals are completed for lenders to make a lending decision from only. Unlike private appraisals, they do have very strict guidelines that must be met. The guidelines are then reviewed at least twice following completion of the report by underwriting professionals, as well as submitted to the FANNIE MAE and FREDDIE MAC UCDP electronic review program for review.
The most important thing to remember when having a private appraisal done is it can’t be used to close any secondary market loan and as such, is not required to meet strict lending guidelines. Private appraisals are not reviewed nor underwritten by professionals in the mortgage industry.
A lot of people are asking us if we can undertake valuations that may then be used to banks for mortgage purposes. Some also uses the bank appraisal fee as an argument to demand for a much lower appraisal fee from the private appraisers.
On the first question, our response is that some lenders do not accept a valuation from a third party appraiser, they have their own in-house appraisers. But getting the services of a private appraiser is beneficial for the landowner; it can be use in negotiation with the bank for a higher loan-able amount.
Why bank appraisal has lower fee than the private? It is pretty simple, the banks will profit not in the appraisal but rather in the home loan transaction.
How then private appraisals differ from those provided by banks? Banks are interested in quick turnaround, thus the valuer assigned has to conduct valuation based on bank standards. Bank also has policies that served as guidelines to their
There are few appraisal companies that are successful in getting appraisal jobs from banks. They are mostly accredited by the Central Bank. Fees are low and turnaround time from receiving instructions to having to send the appraisal report is short. Situation that newly passed appraisers cannot cope up.
However, if a client gets the services of a private appraiser, they can instruct the valuer directly for their own purposes. Not to side with the client, but in providing unbiased report. The most important client can expect as a minimum is a quality and independent report.
Click on home evaluation below.