The ABCs of Understanding the Appraisal Process

While it might seem complicated, understanding the appraisal process is simpler than you think. It’s as easy as learning your ABCs. Well, not that easy! 

The good news is we’re here to help answer any appraisal questions and guide you through the appraisal process one step at a time. Let’s learn our appraisal ABCs.

A is for Appraiser Selection.

This step comes before you ever submit an appraisal for review and is perhaps the most important step you’ll take. When choosing an appraiser, ensure you’re streamlining your appraisal process by gathering all of the necessary documents. Get copies of the appraiser’s license(s), E&O, resume, sample appraisals, and check their status on ASC.gov. 

Remember, you want to make sure you’re hiring a certified appraiser with the appropriate qualifications, and not just the appraiser with the lowest bid. By having the information above, you’re ensuring that you’re selecting bidding appraisers based on highest quality as opposed to lowest price.  

B is for Bank Responsibility.

One of the keys to the appraisal process is gathering documents. Below are some of the things you may need, or the things your appraisal management company (AMC) will need, for the appraiser to complete the appraisal assignment:

1. If it’s a construction loan, the appraiser will need a copy of the plans and specifications, budget and/or cost breakdown.
2. If the appraisal is for a purchase, the appraiser needs a copy of the sales contract.
3. When the property is non-owner occupied, there are typically leases and/or rent rolls that the appraiser will need. Gather these up-front.
4. The legal description, which may be from a survey or property tax card.
5. If it’s for renovations, make sure the details of the renovations are provided (costs and plans if applicable).

C is for the Commercial Appraisal Process. 

Commercial appraisals don’t have to be complicated. When it comes to commercial appraisals, here’s how the appraisal process works at MountainSeed, though process change often:

1. The client (that’s you – the bank or credit union) submits the order.
2. The AMC (that’s us) reviews the new order and sends out for bids.  
3. Appraisers have 1 business day to respond to the bid request.
4. We review the bid results and release them to the client.    
5. The client selects a bid and triggers assignment of the order.
6. The appraiser accepts the order.
7. Our operations team follows up with the appraiser and tracks the order. These might include anything from whether the appraiser able to reach the borrower/property contact and schedule the inspection, to whether the inspection held. It also could include things like a reminder that the due date approaching, or following-up with appraiser if they miss their due date and are past-due.
8. The appraiser uploads their completed report (initial submission).
9. MountainSeed begins our review.
10. The reviewer requests revisions for material defects and credibility if necessary.
11. The appraiser uploads their revised report if applicable.
12. The reviewer uploads a completed review.
13. Our Operations team members complete the assignment for the client.
14. The client receives a notification that their order has been completed and retrieves the documents.

If all of these steps seem overwhelming or stressful, perhaps you should consider hiring an appraisal management company. An AMC can do a lot to alleviate some of the headaches surrounding the appraisal process.

For example, since we recommend checking your appraisers’ licensing and status, MountainSeed tracks ASC disciplinary actions and the appraisers’ licenses and E&O expirations for our clients. By taking care of this for our clients, it’s one less thing they have to worry about.

Just like that, you know your appraisal ABCs! Let’s recap:

A – Appraiser Selection

B – Bank Responsibility

C – Commercial Appraisal Process 

D – Determining AMC Need

If you’re looking to streamline your appraisal process, let’s talk. We’re ready when you are!