Maybe you’re in the market to purchase a home. Or maybe you want to refinance. Either way, having the home appraised is a critical step that will provide you with valuable information and determine the financing options available to you. It’s important to be wary of hidden appraisal fees.
However, you might not be aware that often times the appraiser does not receive this whole fee. Instead, many lenders now book appraisers through management companies or brokers, and those companies take a cut of the fee. By the time the appraiser is paid, his or her share might be as little as 40% of the charge levied on the home buyer. That can be a real disincentive for the more experienced appraisers, who may balk at having to work through a third party.
Recent mortgage reform legislation has mandated that appraisers receive “customary and reasonable” fees for the markets in which they serve. However, loopholes in the legislation as well as a continued lack of transparency in the hiring process continue to leave consumers in the dark. Without knowledge of where their money is going, and how much the appraiser is actually being paid, consumers have no control over the quality and experience of the appraiser that they are paying for. The legislation also prohibits the borrower from hiring the appraiser in a loan transaction.
You would never knowingly overpay for an inferior product at a traditional store; so why would you feel any differently about the appraisal process? At Washington Federal, we hire our appraisers directly. This means that we can ensure a higher standard of service, professionalism and experience for the same price. Being able to hand-select the best appraisers helps guarantee you receive an accurate appraisal.
After all, we have just as much incentive as you do to make sure that the home you are purchasing or refinancing is fairly valued. And by cutting out the middleman, we offer compensation that attracts the most experienced appraisers who do the best work.
Until legislation is shored up and loopholes are closed, consumers must demand transparency in the appraisal process. Before you commit to working with a home lender, ask them what the appraiser will actually receive from the fees you’ll be charged.